Ivan Agaba2026-09-062026-09-062026-06-25https://hdl.handle.net/20.500.12311/3653UndergraduateThis study examined the impact of credit terms on the financial performance of Small and Medium Enterprises (SMEs) in Mukono Central Division. The study focused on credit period, cash discounts, and collection policies as the key dimensions of credit terms. A descriptive research design was used, and data were collected from SME owners and managers through questionnaires. The data were analyzed to determine the relationship between credit terms and financial performance. The findings indicated that effective credit terms improve cash flow, reduce bad debts, and enhance profitability. SMEs with clear credit policies and efficient debt collection practices reported better financial performance than those with weak credit management systems. The study concluded that credit terms have a significant influence on the financial performance of SMEs in Mukono Central Division. It recommends that SME owners adopt appropriate credit periods and strengthen debt collection procedures to improve business performance. Key Words: Credit Terms, Financial Performance, SMEs, Mukono Central Division.enDissertation