Determinants of Credit Access to Small Scale Enterprises: A Case Study of Centenary Bank Kabale Branch-Kabale District.
Access to credit is a crucial factor for the growth and sustainability of small-scale enterprises (SSEs), especially in developing areas. This study aimed to explore the factors influencing credit access for SSEs in Kabale District, Uganda, with a particular focus on Centenary Bank, Kabale branch. A...
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| Format: | Thesis |
| Language: | English |
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Kabale University
2024
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| Subjects: | |
| Online Access: | http://hdl.handle.net/20.500.12493/2436 |
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| Summary: | Access to credit is a crucial factor for the growth and sustainability of small-scale enterprises (SSEs), especially in developing areas. This study aimed to explore the factors influencing credit access for SSEs in Kabale District, Uganda, with a particular focus on Centenary Bank, Kabale branch. A mixed-methods approach was used, combining both quantitative and qualitative data collection techniques. The results indicated that several key factors significantly affect SMEs' ability to secure credit. Complex and lengthy lending processes were identified as major obstacles, with many SMEs noting that documentation requirements and processing delays discouraged them from applying for loans. The need for collateral was highlighted as a key determinant, as many SME owners reported being unable to provide sufficient collateral, resulting in loan rejections. The study also found that a lack of understanding of credit bureau policies negatively affected SMEs' willingness to apply for loans, leading to mistrust of the credit system. Those with higher levels of education and training were more likely to have better access to credit, as they demonstrated greater confidence in managing financial records and understanding loan requirements. Economic factors, such as high interest rates, were seen as significant barriers to borrowing, while strict regulatory frameworks were perceived as obstacles to lending. The study emphasizes the importance of targeted interventions to improve credit access for small-scale enterprises in Kabale District. Recommendations include simplifying lending procedures, creating more flexible collateral policies, raising awareness about credit bureaus, and offering education and training programs for SME owners. |
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