Credit financing and financial performance of small and medium enterprises (SMEs) in Jinja city council.

Abstract

This study examined on the effect of credit financing on the financial performance of small and medium enterprises in Jinja city council. The study applied a cross sectional research design and descriptive approach. Data was collected from 65 as a target population with accessible unit of inquiry being 56 respondents consisting of retail shops, boutiques, saloons, hardware, and mobile money shops. Data was collected with a closed ended questionnaire and statistical package for social sciences was used for analyzing data from which frequency tables, descriptive statistics, reliability, validity, correlation and regression results were obtained. The study findings revealed that there is a positive and significant relationship between credit policy and financial performance, interest rate and financial performance, and also on credit management on financial performance of small and medium enterprise. The study therefore recommends that to improve on financial performance, factors of credit policy, interest rate, and credit management should be considered.