Journal
Metropolitan Journal of Academic and Applied Research
MJAAR
Financial Management Practices And Growth Of Small And Medium Enterprises: A Case Study Of SMEs In Mbarara City
Dr Ariyo Gracious Kazaara
| Journal | Metropolitan Journal of Academic and Applied Research (MJAAR) |
| Volume / Issue | Vol. 5, No. 6 |
| Published | 30 June 2026 |
| ISSN | 3006-6417 |
Abstract
This study investigated the relationship between financial management practices and the growth of Small and Medium Enterprises (SMEs) in Mbarara City, Uganda. Financial management practices examined included working capital management, financial record-keeping, budgeting and planning, and investment decision-making. The study was guided by a cross-sectional survey design and collected data from a sample of 120 SME owners and managers using structured questionnaires. Data were analyzed using descriptive statistics, Pearson correlation, and multiple regression analysis. Results revealed that financial management practices were positively and significantly associated with SME growth (r = 0.687, p < 0.01). Regression analysis showed that working capital management (β = 0.312, p < 0.05), financial record-keeping (β = 0.278, p < 0.05), and budgeting and planning (β = 0.241, p < 0.05) were significant predictors of SME growth, collectively accounting for 62.4% of the variance in SME growth (R² = 0.624). The study concludes that robust financial management practices are a critical determinant of SME growth and recommends that SME owners receive formal financial literacy training and that government establish financial management support units for SMEs across Ugandan cities.
Keywords
Financial management
Working capital
SME growth
Budgeting
Financial record-keeping
Mbarara City
Uganda
Cite This Article
Dr Ariyo Gracious Kazaara (2026). Financial Management Practices And Growth Of Small And Medium Enterprises: A Case Study Of SMEs In Mbarara City. Metropolitan Journal of Academic and Applied Research, 5(6). https://journals.miu.ac.ug/pages/article.php?article_id=479
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