The effects of financial distress on financial performance: An empirical analysis of SMEs in Sheema, Buhweju, Rubirizi, and Bushenyi districts
This study investigated the impact of financial distress on the performance of small and medium enterprises (SMEs) in Sheema, Buhweju, Rubirizi, and Bushenyi Districts, Uganda. Specifically, it examined the effects of excessive debt, inadequate capital, poor management practices, unwise expansion, i...
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| Language: | English |
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African Journal of Business Management
2025
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| Online Access: | http://hdl.handle.net/20.500.12493/2893 |
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| author | Mpora, Eliab Byamukama Bwengye, Anny Katabaazi Atukunda, Emilly Ngirababo, Rwusira Dan |
| author_facet | Mpora, Eliab Byamukama Bwengye, Anny Katabaazi Atukunda, Emilly Ngirababo, Rwusira Dan |
| author_sort | Mpora, Eliab Byamukama |
| collection | KAB-DR |
| description | This study investigated the impact of financial distress on the performance of small and medium enterprises (SMEs) in Sheema, Buhweju, Rubirizi, and Bushenyi Districts, Uganda. Specifically, it examined the effects of excessive debt, inadequate capital, poor management practices, unwise expansion, intense competition, litigation, and unfavorable contracts on SMEs. Financial distress, if left unchecked, can lead to bank failures and severely harm the economy, emphasizing the need for close monitoring. This study aimed to determine the relationship between financial distress and SME performance. A descriptive research design was adopted, involving in-depth analysis of data collected from 180 respondents across the four districts. The findings revealed a significant negative correlation between financial distress and SME performance. As financial strain increased, financial performance declined, and vice versa. The study recommends that SMEs leverage technology to manage their financial records, ensuring ease of auditing and access to credit. Additionally, SMEs should employ skilled accountants for bookkeeping to enhance the quality of their financial records. |
| format | Article |
| id | oai:idr.kab.ac.ug:20.500.12493-2893 |
| institution | KAB-DR |
| language | English |
| publishDate | 2025 |
| publisher | African Journal of Business Management |
| record_format | dspace |
| spelling | oai:idr.kab.ac.ug:20.500.12493-28932025-03-05T00:01:00Z The effects of financial distress on financial performance: An empirical analysis of SMEs in Sheema, Buhweju, Rubirizi, and Bushenyi districts Mpora, Eliab Byamukama Bwengye, Anny Katabaazi Atukunda, Emilly Ngirababo, Rwusira Dan Financial distress performance small and medium enterprises This study investigated the impact of financial distress on the performance of small and medium enterprises (SMEs) in Sheema, Buhweju, Rubirizi, and Bushenyi Districts, Uganda. Specifically, it examined the effects of excessive debt, inadequate capital, poor management practices, unwise expansion, intense competition, litigation, and unfavorable contracts on SMEs. Financial distress, if left unchecked, can lead to bank failures and severely harm the economy, emphasizing the need for close monitoring. This study aimed to determine the relationship between financial distress and SME performance. A descriptive research design was adopted, involving in-depth analysis of data collected from 180 respondents across the four districts. The findings revealed a significant negative correlation between financial distress and SME performance. As financial strain increased, financial performance declined, and vice versa. The study recommends that SMEs leverage technology to manage their financial records, ensuring ease of auditing and access to credit. Additionally, SMEs should employ skilled accountants for bookkeeping to enhance the quality of their financial records. 2025-03-04T13:49:59Z 2025-03-04T13:49:59Z 2025-01 Article Mpora, E. B., Katabaazi-Bwengye, A., Atukunda, E., & Dan, N. R. (2025). The effects of financial distress on financial performance: An empirical analysis of SMEs in Sheema, Buhweju, Rubirizi, and Bushenyi districts. 1993-8233 http://hdl.handle.net/20.500.12493/2893 en 19; 1 Attribution-NonCommercial-NoDerivs 3.0 United States http://creativecommons.org/licenses/by-nc-nd/3.0/us/ application/pdf African Journal of Business Management |
| spellingShingle | Financial distress performance small and medium enterprises Mpora, Eliab Byamukama Bwengye, Anny Katabaazi Atukunda, Emilly Ngirababo, Rwusira Dan The effects of financial distress on financial performance: An empirical analysis of SMEs in Sheema, Buhweju, Rubirizi, and Bushenyi districts |
| title | The effects of financial distress on financial performance: An empirical analysis of SMEs in Sheema, Buhweju, Rubirizi, and Bushenyi districts |
| title_full | The effects of financial distress on financial performance: An empirical analysis of SMEs in Sheema, Buhweju, Rubirizi, and Bushenyi districts |
| title_fullStr | The effects of financial distress on financial performance: An empirical analysis of SMEs in Sheema, Buhweju, Rubirizi, and Bushenyi districts |
| title_full_unstemmed | The effects of financial distress on financial performance: An empirical analysis of SMEs in Sheema, Buhweju, Rubirizi, and Bushenyi districts |
| title_short | The effects of financial distress on financial performance: An empirical analysis of SMEs in Sheema, Buhweju, Rubirizi, and Bushenyi districts |
| title_sort | effects of financial distress on financial performance an empirical analysis of smes in sheema buhweju rubirizi and bushenyi districts |
| topic | Financial distress performance small and medium enterprises |
| url | http://hdl.handle.net/20.500.12493/2893 |
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