MJAAR

Financial Management Practices And Growth Of Small And Medium Enterprises: A Case Study Of SMEs In Mbarara City

Dr Ariyo Gracious Kazaara


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
Metropolitan Journal of Academic and Applied Research

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

More in This Issue

View full issue →
36
The role of higher education institutions in modeling knowledge-competency partnerships for national development
Dr. Arinaitwe Julius1 , Asiimwe Isaac Kazaara2 , Nabaasa Desire3
higher education institutions knowledge-competency partnerships national development structural equation modeling
37
The Role Of Micro Finance Interventions On Poverty Reduction In Mukono District: A Case Study Of Goma Lc1 Zone, Mukono Town
Kabeije Immeldah, Zikusooka Enock
Microfinance Microcredit Microsavings Microinsurance
38
The Role Of Mobile Money Banking In Promoting Financial Inclusion In Rural Areas: A Case Of Mobile Money Users In Mityana District
Nakayiki Stella, Irumba Alex
Mobile money banking financial inclusion rural finance MTN Mobile Money
39
The Use of Donor-Funded Programs to Address Structural Gaps in Ugandan Public Service Delivery
Dr. Twinomujuni Rosebell1 , Asiimwe Isaac Kazaara2 , Ahumuza Audrey3
donor-funded programs structural gaps public service delivery Uganda
40
Working Capital Management And Financial Performance Of Saccos In Ngoma Town Council, Nakaseke District
Menya Stanely, Irumba Alex
Working Capital Management Financial Performance SACCO Ngoma Town Council