Understanding growth challenges of small-scale businesses: a case study of Kitooro Market, Entebbe

Abstract

Small-scale businesses are a key driver of livelihoods and economic activity in Uganda; however, many struggle to achieve sustainable growth. Despite high levels of entrepreneurial activity, the country faces a high business failure rate, with many enterprises closing within their first few years. This study examined the challenges affecting the growth of small-scale businesses in Kitooro Market, Entebbe Municipality. A cross-sectional descriptive design was employed, using both quantitative and qualitative approaches. Data were collected from 78 participants, including 68 questionnaire respondents and 10 key informants comprising business owners, market leaders, and a municipal official. The study focused on access to finance, entrepreneurial human capital, and the business environment and infrastructure as key determinants of business growth. Findings indicate that small-scale businesses experience only moderate growth (overall mean = 3.26), with limited expansion and employment creation. Access to finance was identified as a major constraint (mean = 3.86), with over 75% of respondents citing high interest rates and lack of collateral as key barriers, and more than 80% relying on personal savings. Business environment and infrastructure emerged as the most significant challenge (mean = 3.99), with over 80% of respondents reporting that high taxes and competition reduce profitability, while about 70% highlighted poor roads and unreliable electricity as disruptive. Entrepreneurial human capital showed moderate influence (mean = 3.61), with only about 40% of respondents having received formal business training. The study concludes that financial, skill-based, and environmental challenges jointly constrain business growth. It recommends improved access to affordable finance, enhanced business training, and investment in infrastructure to support sustainable growth.