Finance Access and Performance of Small and Medium Enterprises in Ntahangwa –Division, Bujumbura Capital City, Burundi. A cross-sectional study.

Abstract

Background.

SMEs contribute significantly to economic development, yet their growth is often constrained by limited financial access. This study investigates the influence of access to finance on the performance of Small and Medium Enterprises (SMEs) in Ntahangwa Division, Bujumbura Capital City, Burundi.

 Methodology.

The study employed a descriptive study design, and a cross-sectional design was also used. The study used a respondent sample of 338 SMEs operating in Ntahangwa Division. Quantitative data are presented using descriptive statistical methods, including tables, charts, and graphs, depending on the data obtained. Qualitative techniques were used to analyze qualitative data from the views of respondents.

 Results

Most respondents were female (55.71%), aged between 40 and 59 years (37.9%), and predominantly operated family-owned businesses (62.6%). Pearson correlation analysis showed significant positive relationships between SME performance and cost of credit (r = .40, p < .01), collateral security (r = .636, p < .01), access to financial information (r = .551, p < .01), and accessibility of financial institutions (r = .860, p < .05). Regression analysis indicates that each of the four financial access variables had a statistically significant predictive effect on SME performance, with accessibility of financial institutions emerging as the strongest predictor (β = .860).

 Conclusion.

Improved financial access strongly enhances SME performance. High interest rates, stringent collateral requirements, limited financial information, and poor institutional outreach hinder business growth and profitability.

 Recommendation.

Financial institutions should reduce credit costs, relax collateral conditions, increase information dissemination, and expand outreach through community-based mechanisms. Policymakers should also strengthen financial inclusion strategies to promote SME sustainability and competitiveness in Ntahangwa Division.