Assessment of the factors affecting credit access and performance of SMEs

Abstract

The purpose of this article was to investigate the assessment of the factors affecting credit access and the performance of small and medium enterprises in Seguku trading center, Makindye Sabagabo, Wakiso district. The study was guided by the following objectives; to establish how collateral can affect credit access and performance of SMEs, to know how amount borrowed/loan size can affect credit access and performance of SMEs and to find out how financial records affect credit access and performance of SMEs. A case study and cross-section was used and questionnaires administered to the SMEs. Simple random sampling was used and a sample of 78 small businesses was considered with a response rate of 86.7%. Data was analyzed using SPSS version 16. Correlation analysis was carried out to establish the association among the variables. Findings reveal that there was a significant positive relationship factors affecting credit access and performance of SMEs. Based on the findings, it can therefore be recommended that in order to improve the performance of SMEs, there is need by the owners to fulfill the set credit terms and conditions in order to maintain a good relationship with financial institutions and improve access to credit by SMEs.