Debt Management Policies and Performance of Small Scale Businesses in Jinja District-Uganda

ABSTRACT

The study sought to assess the effect of debt management policies on the performance of small-scale Businesses in Jinja-Uganda. It was guided by three specific objectives, which included I) to determine the effect of reviewing interest rates on the performance of small-scale businesses in Jinja district~, to establish the effect of negotiating with suppliers on the performance of small-scale businesses in Jinja district and to establish the relationsh4~ between debt management policies and financial performance of small scale businesses in Jinja district. This research employed a cross~-sectional, survey and descriptive research design to describe the variables and the questionnaire and interview guide were used as the research instruments. Descriptive statistics used in this study included frequencies, means and regression analysis on variables. The findings revealed the following; The findings indicated that reviewing interest rates significantly affects the performance of small-scale businesses in Jinja district, this effect, therefore, implies that reviewing interest rates highly contributes to the performance of Small scale businesses in Jinja district Uganda, the findings revealed that there is a significant effect negotiating with suppliers has on the performance of small scale businesses in Jinja district, findings of this study proved a positive significant relationship,~ between debt management policies and performance of small scale businesses in Jinja district. Still, the conclusions were that; there is a positive significant effect reviewing interest rates has on the performance of small scale businesses in Jinja district, effective negotiating with suppliers significantly improves the performance of small scale businesses in ]iiija district. debt management policies is h/ql?/y related to the performance of small-scale businesses in Jinja district Uganda. The researcher recommended that the; owners of small-scale businesses should develop a good system to monitor debt payments, record and track all the debt payments so that there is effectiveness in the payment of debt and ensure to cover loopholes in the system to enhance performance, owners and managers of small scale businesses should develop negotiating with suppliers system for example alternatives ways of collecting cash from customers which makes negotiating with suppliers easy and flexible so as to boost performance, and finally owners of small scale businesses should develop a debt management system and make sure they always have a debt plan that enables them to have minimum cash balances at all times, this will help them control debts and hence increase in the performance of their businesses. Contribution to knowledge; the following are the debt management techniques used in maintaining the performance of small-scale businesses in the Jinja district; reviewing /17 interest rates and negotiating with suppliers. The following are the measurements of performance in small-scale businesses in the Jinja district; profitability levels and sales growth.