Structure of Government Support and Sustainability of SMEs in Uganda

Abstract

This study was carried out to establish whether structure of government support has any association or influence onto sustainability of SMEs in Uganda. The focus was to ascertain whether there is a link between how government provides support to SMEs and sustainability of these SMEs. A maximum sample size of 384 SMEs was selected. Questionnaire approach was used to collect data from the owners and or managers of SMEs. Based on factor analysis, two components of structure of government support were established namely; quality of structure of government support and extent of policy implementation. To test the association of the variables, correlation analysis was carried out. The results from this analysis indicated that both components of structure of government support had significant association with SME sustainability in Uganda. Quality of structure however, had higher degree of association as compared to extent of policy implementation. Structural Equation Modeling (SEM) analysis was carried out to check the degree of influence of structure of government support onto SME sustainability. The results indicated that both components of structure of government support have influence onto SME sustainability. Based on this, it was concluded that structure of government support has a significant association with and influence onto SME sustainability in Uganda. It was therefore recommended that there was need for government support towards SMEs to be properly structured in order to realize SME sustainability. The structuring needs to take into consideration the quality of the structure as well as extent to which SME policy is implemented.