The Portrait of Small and Medium Enterprises (SMEs) and the Main Obstacles Faced by Businesses: Evidence from Bukedi Sub-region of Uganda

Abstract

This paper uses primary data to examine the portrait and obstacles faced by SMEs in Bukedi sub-region, Uganda. Evidence suggests that most businesses surveyed (57.6%) were one-man ventures where self-employed people solely managed their enterprises. This indicts the perceived role of SMEs to employment growth and poverty reduction. With the exception of seemingly technical fields like drug-shop business, people without formal education and early leavers exhibited formidable entrepreneurial orientation in non-skill-oriented businesses. This included selling essential products (72.3%), food (100%), produce (57.2%) and running restaurants (81.8%). Therefore, the decision to undertake a specific business might have been determined by the level of education of entrepreneurs. The empirical results further indicate that the factors motivating business start-ups were both “push” and “pull” factors. For the former, circumstances forced unemployed individuals (66.8%) to start business to help themselves, whereas in the latter scenario, attractive conditions lured people (33.2%) into starting business. The study recommends that to augment SME performance, government needs to become solution oriented and initiate robust supportive strategies in areas of regulatory framework, electricity, finance, and enhancing purchasing power. This has got massive potential to revitalise the sector for Bukedi’s economic transformation and development.