THE RELATIONSHIP BETWEEN FINANCIAL LITERACY TRAINING AND FINANCIAL PERFORMANCE OF SMALL AND MEDIUM SIZE ENTERPRIZES IN MUKONO MUNICIPALITY. A CROSS-SECTIONAL STUDY.

Abstract

Background

The research sought to determine the effect of financial literacy training on financial performance of SMEs SMEs in Mukono Municipality, Uganda. 

Methodology

Explanatory research design was utilized in the assessment of the relationship between microfinance services and the financial performance of SMEs. The target population of the research was 782 SMEs in Mukono Municipality and the sample size was 260 SMEs. A stratified and simple random sampling method was utilized in choosing the 260 SMEs. Semi-structured questionnaires were utilized in the collection of primary data. Descriptive statistics such as frequency distribution, mean, standard deviations, and variance were used. Inferential statistics in the form of multiple regression analysis was used to test the effect of microfinance services on the financial performance of SMEs.

Results

Financial literacy training was found to have an insignificant effect on the financial performance of SMEs in the Mukono Municipality. Most of the respondents concurred that there are easy learning procedures and finally, respondents agreed that financial literacy training helped them utilize on best credit management practices as indicated by the mean of 3.74.

Conclusion

The study further concluded that Small and Medium Enterprizes in Mukono Municipality, Uganda faced challenges in accessing financial literacy training that could positively impact on their financial performance.

Recommendations  

The study recommends that policy makers should come up with policies to make it mandatory for microfinance institutions to conduct capacity training programs as part of the corporate social responsibility to Small and Medium Enterprizes owners to boost their awareness and knowledge about the same to enhance the utilization of microfinance services in Uganda