Nakalembe Immaculate, Stephen M. A Muathe, Samuel Maina
Kenyatta University
Youth-owned micro, small, and medium businesses face various constraints while accessing financial services in Uganda. Various stakeholders have assisted these enterprises in accessing finance at better conditions but their non- financial performance has continued to deteriorate. This study tried to investigate the effect of access to financial services on non-financial performance of youth-owned MSMEs in Mukono district, Uganda. Specific objectives included effect of bank, branch network, financial information, loan accessibility and financial technology on non-financial performance of youth-owned micro, small and medium enterprises. The study's guiding theories were the resource-based view, dynamic capability, and innovation of entrepreneurship theories. A positivism research philosophy and explanatory research design were used. The target population was 3717 registered MSMEs. A sample size of 400 was obtained using both stratified and simple random sampling methods. Primary data was collected using questionnaires, analyzed using multiple regression analysis. The study's findings revealed that financial information, bank branch networks, loan accessibility, and financial technology had a positive and significant effect non-financial performance of youth-owned MSMEs. The study concluded that access to financial services is critical to non-financial performance of youth-owned MSMEs in Mukono district, Uganda. The study recommends that youth-owned MSMEs should first gather reliable information about operations of financial service providers to avoid being charged hefty penalties and interests, branch expansion to provide greater supply of credit in order to improve the non-financial performance of youth-owned MSMEs. The study further recommends that financial institutions should reduce collateral requirements in order to increase micro-credit loan uptake by the youth who own MSMEs.
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