The contribution of commercial banks towards the growth of SMES in Mbale central market

Abstract

The study was the contribution of Commercial Banks towards the growth of SMEs in Mbale Central Market. The study took three specific objectives and these were examine to examine the different forms of services commercial banks offer to SMEs, the challenges faced by SMEs while acquiring services from commercial banks and to examine the contributions of commercial banks towards the growth of SMEs in Uganda. The study employed a descriptive research design where both qualitative and quantitative approaches were used. The study took a sample size of 24 respondents out of a population of 25 respondents. Key informants were SMEs managers. The study applied two research instruments; these were questionnaires and interview guide. Study findings indicated that the major forms of services commercial banks offer are extension of loans, financial advise, deposit services, extend corporate cards and offering of Bank statements. As far as the challenges faced by SMEs while acquiring services from commercial banks are concerned, it was found that there is lack of collaterals security, limited information, limited financial skills, competition and scarcity of long term financing and it was discovered that the contributions of commercial banks towards the growth of SMEs in Uganda are as follows; offering loans, there are available from commercial banks, access to capital and accurate loans and the availability of finances. It is therefore recommended that commercial banks should endeavor to avail financial information to the public always on time and increment in awareness on the financial services is another strategy that enhance the reduction information asymmetries among SMEs, SMEs owners should make up groups inform of SACCOs so that they have collateral security in securing credit from commercial banks and Training of SME owners on risk management for example financial risk management will enhance on the performance of small and medium enterprises in Uganda