Makerere University Access to Finance and Development
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MAKERERE UNIVERSITY ACCESS TO FINANCE AND DEVELOPMENT OF ENTREPRENEURSHIP BEHAVIOURS ACASE STUDY: SMALL AND MEDIUM ENTERPRISES (SMEs) IN RUBAGA DIVISION. BY BAGUMA CHARLES 07/U/7224/EXT SUPERVISOR Ms: MBATUDDE SHEILA ARESEARCH REPORT SUBMITTED TO MAKERERE UNIVERSITY IN PARTIAL FULFILMENT FOR THE AWARD OF THE DEGREE IN BACHELOR OF COMMERCE. MAKERERE UNIVERSITY JULY 2011 1 DECLARATION I Baguma Charles declare that this research report is my original work and has never been at any one time submitted for award of a degree in any University. Signature………………………………………… BAGUMA CHARLES. Date……………………………………………… i APPROVAL This report has been submitted with my approval as the supervisor and is worth for the award of Bachelor of Commerce Degree of Makerere University. Signature………………………………………… Ms. MBATUDDE SHEILA SUPERVISOR Date…………………………………………….. ii DEDICATION I dedicate this work to all those who have sacrificed resources and time towards my education. God bless you. To my mummy late Winfred Mbabazi. May her soul rest in eternal peace. iii ACKNOWLEDGEMENT I thank God for the knowledge, wisdom and understanding that have enabled me to complete this research project, without you I would not have made it. I sincerely thank everyone who contributed in one way or another to the success of my education. I am very grateful to my supervisor Ms. Mbatudde Sheila for her professional advise, guidance, patience and dedication to make sure I produce excellent work. Special thanks goes to my Daddy Isingoma Anthony, Uncle Wandera, Uncle Ammon, My dear sisters Kimuli Juliet, Asiimwe Josephine, My brother Monday James, Cousins Ssejjemba Godfrey and Ssewagaba Yowasi for their financial, moral support, guidance, love and encouragement you have given . May God Bless you. I also extend appreciation to my dear friends Swadik, Damba, Senfuma, Robert Asiimwe, Rogers, Okware, Monica, Duhaga, Loius, Leonard, sarah and my wife Marion not forgetting beloved Jotham for their encouragement I am glad that I met you . iv Table of Contents Declaration ............................................................................................................................................... i Approval ................................................................................................................................................. ii Dedication .............................................................................................................................................. iii Acknowledgement .................................................................................................................................. iv CHAPTER ONE ..................................................................................................................................... 1 1.0 Introduction ....................................................................................................................................... 1 1.1Background of the study ..................................................................................................................... 1 1.2 Statement of the problem ................................................................................................................... 3 1.3 Purpose of the study........................................................................................................................... 3 1.4 Objectives of the study ...................................................................................................................... 3 1.5 Research questions ............................................................................................................................ 3 1.6 Scope of the study ............................................................................................................................. 4 1.7 Significance of the study .................................................................................................................... 4 CHAPTER TWO .................................................................................................................................... 5 Literature review ..................................................................................................................................... 5 2.0 Introduction ....................................................................................................................................... 5 2.1 Access to finance ............................................................................................................................... 5 Sources of finance ................................................................................................................................... 5 2.2.1 Short-term sources of financing ...................................................................................................... 6 Trade credit ............................................................................................................................................. 6 Overdraft facility ..................................................................................................................................... 6 2.2.1.3 Bank bills finance ........................................................................................................................ 7 Long-term sources of financing ............................................................................................................... 8 Ordinary share capital .............................................................................................................................. 8 2.2.4 Preference shares ............................................................................................................................ 9 v Debentures ............................................................................................................................................ 10 Retained earning.................................................................................................................................... 10 Venture capital ...................................................................................................................................... 11 2.3 ENTREPRENURSHIP .................................................................................................................... 12 2.4 CHARACTERISTICS OF ENTREPRENUER BEHAVIOURS ....................................................... 12 2.4.1Plan everything .............................................................................................................................. 12 2.4.2Manage money wisely ................................................................................................................... 13 2.4.3 Project a positive business image .................................................................................................. 13 2.4.4 Take advantage of new technology................................................................................................ 14 2.4.5 Create a competitive advantage ..................................................................................................... 14 Innovation and Creativity ...................................................................................................................... 15 2.4.7 Perseverance ................................................................................................................................. 16 Self-confidence ..................................................................................................................................... 17 2.5 RELALTIONSHIP BETWEEN ACCESS TO FINANCE AND DEVELOPMENT OF ENTRENUERSHIP BAHAVIOUR AMONG SMEs. ............................................................................ 17 2.6 Conclusion ...................................................................................................................................... 19 CHAPTER THREE ............................................................................................................................... 20 METHODOLOGY ................................................................................................................................ 20 3.0 Introduction ..................................................................................................................................... 20 3.1 Research Study Design .................................................................................................................... 20 Target Population .................................................................................................................................. 20 3.2 1 Sampling design/methods ............................................................................................................. 20 3.2.2 Sampling design ........................................................................................................................... 20 3.3 Sources of data ................................................................................................................................ 21 3.4Data collection instruments ............................................................................................................... 21 3.5 Reliability and Validity .................................................................................................................... 21 vi 3.6 Data Collection Procedure ..............................................................................................................