Entreprenuerial orientation and access to bank credit by small and medium enterprizes among Katwe metal fabricators

Abstract

The study examined the entrepreneurial orientation and Access to Bank credit controlled by the size of the firm among Metal Fabrication Small and Medium Enterprises; a Case of Katwe. The study was motivated by the dwindling low rate uptake of access to bank credit among Metal Fabrication SMEs in Katwe. The objectives of the study were to examine the influence of networking on access to bank credit among metal fabrication SMEs in Katwe, to determine the influence of innovativeness on access to bank credit among metal fabrication SMEs in Katwe, to assess the influence of risk-taking on access to bank credit among metal fabrication SMEs in Katwe. Three research question were generated based on the objectives. The study adopted the credit rationing theory to conceptualize the variables as used in the study. A cross sectional survey design was adopted where both quantitative and qualitative data was collected. A sample of 169 Metal Fabrication SMEs were determined using Krejcie & Morgan table out of a population of 300 SMEs was selected. Using a simple random sampling 169 questionnaires were administered to collect quantitative data, only 129 questionnaires were filled and returned constituting a response rate of 76.33%. Qualitative information was collected using an interview guide for triangulation purposes from SME owners, Branch managers, relationship Manager (SMEs), and Chairperson of Katwe metal fabrication association, representative from Uganda development Bank using an interview guide and selected using a purposive sampling method. Diagnostics tests were performed as a prerequisite for the parametric analysis for example data was tested for normality and multicollinearity. In the study, analysis was done at different levels first with descriptive statistics and by a multiple regression analysis. The findings of the study revealed a positive significant influence of networking on access to bank credit (Beta =0.390, P value =0.006), a negative significant influence of innovativeness on access to bank credit (Beta =-0.228, P value =0.008) and a negative significant influence of risk-taking on access to bank credit (Beta =-0.218, P value =0.046). The study recommended that efforts should be made to ensure that these metal fabrication SMEs should connect because networking provides avenues through which the government can channel money such as the “Emyoga Scheme” introduced by His Excellence the President of the Republic of Uganda Additionally, every SMEs should include innovativeness in the organization’s core values. SMEs should work hand in hand with financial providers to understand their level of risk appetite and develop a follow-back position in case of losses for business continuity purposes for example taking insurance. Future study could be directed to finding the moderating effect of financial characteristics between entrepreneurial orientation and access to bank credit Key words: Entrepreneurial orientation, Networking, Innovativeness, Risk-taking, firm size, Access to bank credit and Small and Medium Enterprises