Access to finance and economic sustainability of small and medium enterprises in Arua city, Uganda
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Date
2025-10-31
Authors
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Publisher
Muni University
Abstract
The Economic Sustainability of Small and Medium Enterprises (SMEs) is often affected by Access to finance, especially in developing regions such as Arua City, Uganda. This study investigated the relationship between access to finance and the economic sustainability of SMEs in Arua City, focusing on four specific objectives: To establish the relationship between the availability of financial services and economic sustainability; To assess the effect of affordability on economic sustainability; To determine the contribution of ease of finance access to economic sustainability; and to examine the moderating influence of the regulatory environment on access to finance and economic sustainability. The study employed a mixed-methods approach, utilizing both quantitative and qualitative data collection methods. Findings revealed that Pearson correlation coefficient between the two variables is 0.760 indicating a Strong positive relationship between Availability of Financial Services and Economic Sustainability which implies that financial access plays a critical role in the economic stability and longevity of businesses. Pearson correlation coefficient between Affordability and Economic Sustainability is 0.767 indicating likeliness of businesses to engage, resulting in better financial planning, investment opportunities, and ultimately, improved economic outcomes. Pearson correlation coefficient between Ease of Access and Economic Sustainability is 0.768 this Suggests that improving access to financial services is directly related to the sustainability of economic practices. They are better equipped to manage cash flow, invest in growth opportunities, and plan for the long term. The Moderating influence of Regulatory Environment on Access to Finance and economic sustainability was visible through the Strong positive relationship R-value of 0.779 attributed to the combined influence of the regulatory environment, availability of financial services, ease of access, and affordability. Based on these findings, the study recommends increasing awareness of available financial services and implementing financial literacy programs tailored to SMEs. Additionally, policymakers should strive to develop a regulatory environment that balances financial stability with SME growth by ensuring clear, transparent, and flexible financial regulations. Such measures will help enhance the accessibility, affordability, and ease of access to financial services, ultimately fostering economic sustainability among SMEs in Arua City.
Description
A research thesis submitted to the department of business administration and management in partial fulfilment of the requirements for the award of a master of business administration of Muni University
Keywords
Finance access, Economic sustainability, Small and medium enterprises, Arua city, Uganda
Citation
Ndemaru, P. (2025). Access to finance and economic sustainability of small and medium enterprises in Arua city, Uganda (Unpublished graduate dissertation). Muni university, Arua, Uganda