Towards Enhancing Business Survival and Growth Rates in LDCs: An Exploratory Study of the Drivers of Business Failure among SMES in Kampala-Uganda

Abstract

Existing studies indicate that the survival and growth of small and Medium Size Enterprises (SMEs) significantly accounts for the economic performance of LDCs like Uganda. However, the failure rate of SMEs in Uganda is still high as new start-ups collapse shortly after they assume operations. The purpose of this study was to establish and describe the drivers of business failure such that by countering them, more small scale businesses can survive, grow and thereby boost the economic performance of the host countries. The Data used was collected from 50 SMEs operating in Kampala. Data was cleaned and analyzed to extract the salient factors that cause SMEs to shutdown pre-maturely. Based on the findings, this study identifies and proposes solutions, key policy interventions and approaches to be adopted towards enhancing business survival and growth rates. Unlike related studies, this research uses data from the area with the highest business activity in Uganda which is a fair benchmark for other areas seeking economic growth.