QUESTIONNAIRE

ABOUT THE EFFECT OF SMALL SCALE BUSINESSES ON THE GROWTH OF TOWNS IN UGANDA.

CASE STUDY: BANDA PARISH

1 Dear respondent,

I am a Namutebi Anita student of Kyambogo University, am carrying out a study on the above stated topic. You have been selected to participate in the study to provide information to enable me accomplish this research. The information given shall be treated with at most confidentiality and shall only be used strictly for academic purpose.

Kindly spare a little time to fill this questionnaire.

SECTION A: Background Information:

CODE :

Gender?

Male Female

a) 18 – 25 years b) 26 – 35 years

c) 36 – 45 years d) 46 – 55 years

e) 56 years and above

Marital Status.

Married Single Separated

Divorced Widowed Cohabiting

How many people do you live with in your household?

<5 6 – 8 8-10 10>

Religion

Catholic Muslim protestant others

Educational status?

No formal education Primary Secondary Tertiary/university

For how long have you lived in Banda Parish?

1-5 years

6-10 years 10 above

Occupation

Government employee Farmer Private employed Unemployed

House hold monthly income

100000-300000 400000-600000 700000-900000 1000000 and above

SECTION B: Benefits of small scale enterprises on the development of Banda Parish

What benefits do small scale businesses bring to develop small towns like Banda?

Small Scale Businesses provide work to the unemployed person

Develop other industries in the country

They generate tax revenues to the government

They improve incomes of the people

The reduce poverty

Mention other benefits of small scale businesses that can help to develop small towns like Banda

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

What challenges are faced by small scale business in the course of their operation

High taxes and regulations

Stiff competition

Lack of storage facilities

High Inflation

High transportation costs

What other challenges affect small scale business in the course of their operation

High taxes and regulations

What relationship exists between small business enterprises and the growth of towns in Uganda

Equitable distribution of incomes amongst people living in small town who engage in the small scale business operations.

Industrial developments among the different sectors of the economy are also a result of small scale initiatives.

Poverty reduction which is a basis towards the accessibility to basic needs like food, education, housing and medical care.

Social network in form of interrelationships keeps a wide and open mind to development through knowledge and skills development.

Access to financial institutions to widen the capital base for the small scale businesses is also a benefit from the activities of the small scale businesses

Mention other ways in which small scale businesses are related to the growth of town in Uganda?

CHAPTER FOUR

PRESENTATION, ANALYSIS, INTERPRETATION OF FINDINGS

4.1 Introduction

This chapter presents the results in reference to objectives in chapter one. Gender of respondents, Age of respondents, education level of respondents, to assess the benefits of small scale enterprises on the development of Banda Parish to examine the challenges faced by small scale enterprises in developing towns like Banda, to examine the relationship between small business enterprises and the growth of towns in Uganda.

4.2 Findings on general information

Table 2 Socio-demographic Characteristics of the respondents

Respondents

Frequency

Percentage (%)

Sex

Male

Female

Age

15-19

20-24

25-29

30-34

35-39

40 and above

Marital status

Married

Widowed

Separated

Divorced

Number of o people in the house

6-8

9-10

10>

42 12

62 18

Religion Catholic

Muslim

protestant

others

Educational status

No formal education

Primary

Secondary

Tertiary/university

Occupation

Government employee

Farmer

Private employed

Unemployed

Period of staying in Banda

1-5 years

6-10

11 and above years

House hold monthly income

100000-300000

400000-600000

700000-900000

1000000 and above

According the findings in table 4.1 above, majority of respondents 57% were male, 32% aged 25-29 years, 44% divorced, (62%) had 1-3 children, 41% were Catholics 51 ad studied up to secondary school, 56% were privately employed, 65% had stayed in Banda for a period of 6-10 years, 56% were earning 100000-300000/-, 79% were tenants. The researcher also observed that 59% of the respondents were dwelling in Brick/stone houses which they mostly rented from land loads.

Benefits of small scale enterprises on the development of Banda Parish

The responses to the benefits of small scale enterprises on the development of Banda Parish were summarized in the following table;

Table 4.5: benefits of small scale enterprises on the development of Banda Parish

Responses

Frequency

Percent

Small Scale Businesses provide work to the unemployed person

Develop other industries in the country

They generate tax revenues to the government

They improve incomes of the people

The reduce poverty

TOTAL

25.0

15.0

23.3

20.0

16.7

100

Source: Primary data

From the findings, it was found that the majority (25%) of the respondents suggested that small scale businesses provides work to the unemployed persons while 23.3% suggested that SSEs generate tax revenues to the government where as 20% suggested that they improve incomes of the people while 16.7% suggested that SSEs reduce poverty and lastly 15% mentioned that SSEs develop other industries in the country. This implies that small scale businesses are a crucial form for the welfare of the people. This is because most of the entrepreneurs in the area of study were previously employed by larger businesses from where they were able to secure personal savings that accumulated over time and enabled them to start up their own businesses at a small scale since these require little start-up capital.

Table 11: Challenges to the SSEs

CHALLENGES	FREQUENCY	PERCENTAGE
Taxes and regulations	37	55
Competition	13	19.4
Lack of storage facilities	03	4.5
Inflation	06	09
Transportation costs	02	03
Others	06	09
Total	67	100

Source: Primary Data, 2014.

From the table, 55% of the business units noted that taxes and regulations is the most challenge to their businesses these are usually so high yet they are also price takers and have no influence in determining the prices of their products. One would however recommend them to follow the law of demand and supply but still this is under the control of price flows and ceilings. Rather it would be better if the GoU revises its policies as regards business so as to ensure incentives and tax holidays are provided some products.

Competition is another limitation that is faced by the businesses. According to analysis, 19.5% of the respondents agree that this is a challenge brought about by those businesses that possess dynamic capabilities, credible with licensing, taxation and enhances their access to rationed resources such businesses can easily out-price and out-sell the small businesses thus contributing to improved performance for development. SSEs can therefore reduce on the effect of competition by networking with medium and large businesses, better infrastructure and larger markets.

Lack of storage facilities is also a limitation by the business units in Banda Parish. This is especially to those that hardly afford the costs to rent tied shops and rather resort to street retailing and hawking the fact that they have little startup capital that cannot sustain them to posses’ stores for their products. Suggestions are mostly referred to Government to improve on the infrastructural development in the form of huge stores managed by the government to be rented at subsidized amounts in the favor of the business fraternity.

Inflation contributed to 9%, this is in reference to the persistent increase in the prices of the product that the SSEs deal with. This limits their decisions on which price level to sell their products since this is attributed with high taxes. Inflation to them can only be reduced by widening the market base for the large and medium businesses abroad so as not to compete with the small scale businesses. In this way they will be generating foreign incomes that will help improve the value of a shilling against a Dollar and this will endure small scale businesses to increase in the provision of employment opportunities to the labor force.

Transportation costs with a minor percentage of 3% are attributed to poor roads for accessibility purposes in the process of widening their markets. This has increased on their costs since access to rural areas is difficult and this to the business fraternity in the area of study would only be solved by construction of better road networks to the industrialized areas where the SSEs obtain their products.

However, other solutions have been put forward in support of the small scale businesses so as to sustain their activities as they provide employment to the labor force. These included; Traditional Guarantee Associations such as PSF, Nakawa Trading center Association, 360 Network, Financial Sector Development, Market expansion and diversification, Good Governance and Human and cultural capital development

4.4 The relationship between small business enterprises and the growth of towns in Uganda:

In the process of starting a small scale enterprise has a great relationship towards the growth of towns simply because of providing employment opportunities to the labor force, that resides in these small towns. The employment opportunities created by these small scale business improves household incomes which enhances their house hold welfare. However, there are other relationships attributed to this as highlighted below;

Equitable distribution of incomes amongst people living in small town who engage in the small scale business operations.
Industrial developments among the different sectors of the economy are also a result of small scale initiatives.
Poverty reduction which is a basis towards the accessibility to basic needs like food, education, housing and medical care.
Social network in form of interrelationships keeps a wide and open mind to development through knowledge and skills development.
Access to financial institutions to widen the capital base for the small scale businesses is also a benefit from the activities of the small scale businesses

Relationship between small business enterprises and the growth of towns in Uganda.

		Employment opportunities	What kind of activities does your business do
Employment opportunities	Pearson correlation	1.00	0.838***
	Sig.(2-tailed)	.	0.000
	N	67	67
What kind of activities does your business do	Pearson correlation
	Sig.(2-tailed)	0.838	1.00
	N	67	67

Source: Primary Data, 2018.

From the findings, there is a strong positive relationship between employment opportunities and the kind of activities done by the businesses at Pearson correlation coefficient at 0.838. This implies that for every kind of activity involved in such businesses increases on the employment opportunities generated by the businesses. For instance, each activity done in the small scale businesses is an opportunity to the labor force hence more efforts should be done to enhance their performance so as to increase on their contribution to development.

CHAPTER FIVE

DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS

5.0 Introduction

In this chapter, discussion, conclusions and recommendations are made basing on the findings from chapter four. The discussion, conclusions and recommendations were done according to major study themes in relation to the study objectives.

The objectives of the study were; To assess the benefits of small scale enterprises on the development of Banda Parish, to examine the challenges faced by small scale enterprises in developing towns like Banda to examine the relationship between small business enterprises and the growth of towns in Uganda.

5.1 Discussion of the study findings

The study established that there are numerous benefits associated with the small scale enterprises and these were; providing work to the unemployed persons, industries in the country, they generate tax revenues to the government, improve incomes of the people and reduce poverty. These results however correspond with Ariyo (2009) who stated that, SSEs are beneficial towards the economic growth and sustainable development of any town or economy. According to him, SSEs may look small or inconsequential but are actually the foundation of any economically stable nation.

Likewise, Keogh (2002), suggests that small scale businesses provide employment opportunities to the mercies. According to Keogh (2002), the number of people employed by the small scale businesses varies from country to country. According to stoner et al (1996), in Africa, the figure was put between 5-50people while in India the number is between 30-100 people.

The study further revealed that small scale enterprises face numerous challenges in their course of operation and these were; high taxes and regulations, stiff competition, Lack of storage facilities, Inflation, high transportation costs poor managerial skills, limited market, among other and these affect their daily operations which corresponds to Balunywa (2007) who noted that Financial Problems faced by the SSBs hinders the progress of their operation, thus posing an impact on household welfare of the individuals. While estimates vary greatly depending on definitions, the World Bank suggests that almost 30% of employment in low-income countries is generated by the informal economy, while an additional 18% is provided by (formal) small and medium enterprises. Together these two groups contribute 63% of the GD.

In addition, Butler and Cornaggia (2009) stated that the majority of entrepreneurs of small scale enterprises are unaware about the knowledge of managerial field. Therefore, they are performing the non-managerial tasks rather than the tasks of managerial functions such as planning, organizing, leading and controlling. In Support of the above findings, Ariyo, D. (2009) argued that small-scale businesses also faced the acute problem of marketing their products. The problems arise from such factors as small stocks, lack of standardized products, inadequate market knowledge, competition from technically more efficient units, deficient demand, etc. Apart from the inadequacy of marketing facilities, the cost of promoting and selling their products too is high. The result is large and increasing subsidies which impose heavy burden on the government budgets.

5.2 Conclusions

The study was able to achieve its objectives and the researcher can ably conclude as follows:

Benefits of small scale enterprises on the development of Banda Parish

The second objective of the study was to find out benefits of small scale enterprises on the development of Banda Parish and the research findings on this objective concluded that the benefit got from SSEs is that it provides work to the unemployed persons. Equally important were; they Improve incomes of the people, SSEs develop other industries in the country’ SSEs Reduce poverty SSEs Improve incomes of the people. This implies that small scale businesses are crucial to help develop small towns like Banda. This is because most of the entrepreneurs in the area of study where previously employed by larger businesses from where they were able to secure personal savings that accumulated over time and enabled them to start up their own businesses at a small scale since these require little start-up capital.

The challenges faced by the SSEs

The last objective of the study was to establish the challenges faced by the SSEs. The research findings on this study objective concluded the major Challenge facing SSEs was lack of infrastructures as it occupied 35%. Equally stressing were; financial constraints, poor management techniques, competitiveness and high taxes. This implies that challenges of small scale industries require positive attentions from both policy makers and the management of SSEs to achieve self-reliance by utilizing the resources available and harnessing the skills of local people to lay a plat foam that yield steady incomes.

5.3 Recommendations

The study recommended the following;

The government should encourage the banks to reduce on the interests to the loans that they offer to small scale businesses so as to encourage more to join the small scale industry as well as motivating the former to invest more hence increasing household welfare.

The Small scale business owners are encouraged to use skilled and experienced entrepreneurs who are successful in managing business, as this will help them to exploit valuable sources of the development of business world especially small scale industries.

Small scale business owners should design training programs to enhance creativity so as to help shape the behavior needed to be a successful small scale industry owner.

There should be implementation of a balanced entrepreneurship education in the vocation institutes with both theory and practice as this will help contribute to the emergency of new entrepreneurs in Banda.

Government should reduce as well as providing tax incentives to small scale industry owners so as to motivate them startup more advanced industries in Uganda. This would help the industrial sector to develop.

4.4. Areas of further study

The study has provided some areas of further study that have not been tackled by this research

Contribution of the small scale businesses on the welfare
Small scale businesses and provision of employment to the labor force

REFERENCES

Bryan Z, 1990 U.S. Small Business Administration, financial management for the growing business. Indian Hills Community College Small Business Development Center Ottumwa, Iowa

Bushenyi District Local Government (2011).BDLG District Development Plan (2011-2016).

Byaruhanga E.W. 2010.Promotion of micro, small and medium enterprises through financial institutions, development initiatives Africa. Wednesday 21st 2010.

Byaruhanga J.K. (2008); SMEs as a nucleus for Industrialization of Developing Countries, Paper Presented at the 35th International Small Business Congress, November 2008, Belfast, N. Ireland.

Céline K (2005). Financing SMEs in Africa OECD development center Policy Insights No. 7 Policy Insights No. 7 is derived from the African Economic Outlook 2004/2005, a joint publication of the African Development Bank and the OECD Development Centre.

Delno ,L.A. (2006). Proposal and thesis writing :an introduction, 7th reprint 2009.

Donald W (2011). Qualitative methods for business,finance and performance, fifth edition. Ashford Press ltd Gosport

Dwivedi D.N. (2000). The Government and the private sector. Managerial Economics, Vikas publishing house PVT ltd, 576, Masjid road, Jangpura , New Delhi India

Francis. H. and Cliff. J. systems theory Prepared for the Cambridge Dictionary of Philosophy (Copyright Cambridge University Press)

Hall .C. (2002). Entrepreneurship Densities in APEC and Europe: How many entrepreneurs should there be in China, or other developing economies? Small Enterprise Research

Research consultancy

1 Dear respondent,

CHAPTER FOUR

PRESENTATION, ANALYSIS, INTERPRETATION OF FINDINGS

4.1 Introduction

The responses to the benefits of small scale enterprises on the development of Banda Parish were summarized in the following table;

Table 4.5: benefits of small scale enterprises on the development of Banda Parish

4.4 The relationship between small business enterprises and the growth of towns in Uganda:

CHAPTER FIVE

DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS

5.0 Introduction

5.1 Discussion of the study findings

Benefits of small scale enterprises on the development of Banda Parish

5.3 Recommendations

The government should encourage the banks to reduce on the interests to the loans that they offer to small scale businesses so as to encourage more to join the small scale industry as well as motivating the former to invest more hence increasing household welfare.

4.4. Areas of further study

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