CHAPTER THREE

METHODOLOGY

3.0     Introduction

This chapter presents the methodology which consists of the research design, area of study, study population, sample population and selection, sampling technique, data collection method, data quality control, data collection procedures and limitations of the study.

3.1 Research design

Cross sectional research designs will be used following both quantitative and qualitative approaches. The researcher will use the above method because many aspects will be covered in the study concerning the topic of study, qualitative approach will be used because it collects information within a short time while quantitative will be through interview to cross check what has been given.

3.2 Study population and sample size

The studies will be on business people of Banda.

3.3 Sampling Design techniques

According to (Amin, 2005) sampling involves selecting a sample of the population in such a way that samples of the same size have equal chances of being selected.

3.3.1 Sampling Technique

The study will use purposive sampling, according to Barbie, (2001) Purposive sampling is one that is selected based on the knowledge of a population and a purpose of the study.

After the use of the purposive sampling technique, simple random sampling will be used to select the required sample size.

The study will use purposive sampling on all the respondents this is because purposive sampling helps the researcher to get specific information regarding topic of study also because it will help the researcher get people who are well experienced and have enough knowledge about the problem under the study.

3.3.2 Sampling size

The researcher will use simple random sampling to identify the sample size of respondents who will be residents of Banda and carrying out small scale businesses. Mugenda and Mugenda (2003), argue that it is impossible to study the whole targeted population and therefore the researcher will take a sample of the population. A sample is a subset of the population that comprises members selected from the population. Using Krejcie and Morgan’s (1970) table for sample size determination approach, a sample size of 68 respondents will be selected from the total population of 80.

According to (Amin, 2005) sampling involves selecting a sample of the population in such a way that samples of the same size have equal chances of being selected.

The respondents were selected using purposive sampling techniques. Berg (2006) purposive sampling is where the researcher chooses the sample based on what they think would be appropriate for the study, According to Amin, (2003) A Purposive sampling technique will be used because it’s cheap.

3.5 Sources of data collection

Source of data will be from both primary and secondary sources.

• Primary data

Primary data will be obtained from the questionnaires administered on the target respondents who include the business people of banda.

• Secondary sources

Secondary data is data which has been collected by individuals or agencies for purposes other than those of a particular research study. It is data developed for some purpose other than for helping to solve the research problem at hand (Bell, 1997). This will comprise of the literature related to the topic of study. Secondary data shall be obtained from, published articles, journals, News Papers, Text Books, publications relating to impacts of credit on the growth of small and medium enterprises. Secondary data will be sourced because it yields more accurate information than obtained through primary data, and it is also cheaper.

3.6 Data Collection Instruments

The major instruments for data collection will be questionnaires and interview guide. Surveys will be just one part of a complete data collection and evaluation strategy. The major method of data collection for the study will be the survey, which will be done using selected instruments like questionnaires. The questionnaire will provide respondents with ample time to comprehend the questions raised and hence, they will be able to answer factually.

3.6.1 Questionnaires

The questionnaire will be used to collect quantitative data. The researcher will administer the questionnaires to respondents in different respondents including, administrators, finance officers, and procurement staff, which will be designed basing on study objectives and questions. Respondents will read and write the questionnaires themselves. The questionnaires will be close ended and will be considered convenient because they will be administered to the literate and its anonymous nature will fetch unhindered responses.

3.6.2 Interviews

Qualitative data will be collected from the informants using interviews. The interview guide will be structured. This will be used since it’s the best tool for getting first-hand information /views, perceptions, feelings and attitudes of respondents. Both formal and informal interviews will be used to get maximum information from the different respondents to participate in the research.

3.7 Data collection procedures

Upon receiving the University permission to carry out research, the area of study will be visited for purposes of familiarization.  The researcher will seek permission from administrators and once allowed to proceed with research, questionnaires will be issued and interviews will be carried out with the selected respondents.

3.8 Quality control of data instruments

The instrument will be taken to the supervisor to check its correctness there after pilot study will be carried out to find out if it measures what it is meant to for.

3.8.1 Validity and Reliability

The data a collection tools shall be pre-tested on a smaller number of respondents from each category of the population to ensure that the questions are accurate clear and in line with each objective of the study.

3.8.1 Validity

It is the degree to which results obtained from the analysis of the data actually represents the phenomenon understudy, (Mugenda & Mugenda, 2003).  To ensure validity of instrument close guidance of the supervisor will be adopted. This will help to identify ambiguous questions in the interval and be able to re-align them to the objectives.

3.8.2 Reliability

Reliability tests and analysis shall be carried out.

3.9 Data processing and analysis

The raw data will be coded, edited, and arranged ready for analyzing only completed raw data will be analyzed using statistical tables and graphs.

3.10 Limitations of the study

The researcher may face the following challenges in the course of the study;

• The researcher may not get enough time to interview all the respondents, but this will be solved by budgeting for the time appropriately.
• The researcher may also face challenges in language as other respondents may feel comfortable expressing themselves in local languages like Luganda.
• Other researchers may ask for money from the researcher, this will not affect the study as the respondents will be persuaded that the research is meant for academic purposes

QUESTIONNAIRE

ABOUT THE EFFECT OF SMALL SCALE BUSINESSES ON THE GROWTH OF TOWNS IN UGANDA.

CASE STUDY: BANDA PARISH

1           Dear respondent,

I am a Namutebi Anita  student of Kyambogo University, am carrying out a study on the above stated topic. You have been selected to participate in the study to provide information to enable me accomplish this research. The information given shall be treated with at most confidentiality and shall only be used strictly for academic purpose.

Kindly spare a little time to fill this questionnaire.

SECTION A: Background Information:

CODE :          

1. Gender?

Male                                                    Female

2. Age

1. a) 18 – 25 years b) 26 – 35 years

1. c) 36 – 45 years d) 46 – 55 years

1. e) 56 years and above

3. Marital Status.

Married                       Single                          Separated

Divorced                     Widowed                     Cohabiting

4. How many people do you live with in your household?

<5                     6 – 8                   8-10                                     10>

5. Religion

Catholic           Muslim            protestant        others

• Educational status?

No formal education               Primary            Secondary       Tertiary/university

7. For how long have you lived in Banda Parish?

1-5 years

6-10 years                                      10 above

8. Occupation

• Government employee Farmer Private employed        Unemployed

10. House hold monthly income

100000-300000           400000-600000           700000-900000           1000000 and above

SECTION B: Benefits of small scale enterprises on the development of Banda Parish

1. What benefits do small scale businesses bring to develop small towns like Banda?

• Small Scale Businesses provide work to the unemployed person

Develop other industries in the country

They generate tax revenues to the government

They improve incomes of the people

The reduce poverty

1. Mention other benefits of small scale businesses that can help to develop small towns like Banda

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

14. What challenges are faced by small scale business in the course of their operation

High taxes and regulations

Stiff competition

Lack of storage facilities

High Inflation

High transportation costs

15. What other challenges affect small scale business in the course of their operation

High taxes and regulations

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

16. What relationship exists between small business enterprises and the growth of towns in Uganda

Equitable distribution of incomes amongst people living in small town who engage in the small scale business operations.

Industrial developments among the different sectors of the economy are also a result of small scale initiatives.

Poverty reduction which is a basis towards the accessibility to basic needs like food, education, housing and medical care.

Social network in form of interrelationships keeps a wide and open mind to development through knowledge and skills development.

Access to financial institutions to widen the capital base for the small scale businesses is also a benefit from the activities of the small scale businesses

17. Mention other ways in which small scale businesses are related to the growth of town in Uganda?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

CHAPTER FOUR

PRESENTATION, ANALYSIS, INTERPRETATION OF FINDINGS

4.1  Introduction

This chapter presents the results in reference to objectives in chapter one. Gender of    respondents, Age of respondents, education level of respondents, to assess the benefits of small scale enterprises on the development of Banda Parish to examine the challenges faced by small scale enterprises in developing towns like Banda, to examine the relationship between small business enterprises and the growth of towns in Uganda.

4.2 Findings on general information

Table 2 Socio-demographic Characteristics of the respondents

According the findings in table 4.1 above, majority of respondents 57% were male, 32% aged 25-29 years, 44% divorced, (62%) had 1-3 children, 41% were Catholics 51 ad studied up to secondary school, 56% were privately employed, 65% had stayed in Banda for a period of 6-10 years, 56% were earning 100000-300000/-, 79% were tenants. The researcher also observed that 59% of the respondents were dwelling in Brick/stone houses which they mostly rented from land loads.

Benefits of small scale enterprises on the development of Banda Parish

The responses to the benefits of small scale enterprises on the development of Banda Parish were summarized in the following table;

Table 4.5: benefits of small scale enterprises on the development of Banda Parish

Source: Primary data

From the findings, it was found that the majority (25%) of the respondents suggested that small scale businesses provides work to the unemployed persons while 23.3% suggested that SSEs generate tax revenues to the government where as 20% suggested that they improve incomes of the people while 16.7% suggested that SSEs reduce poverty and lastly 15% mentioned that SSEs develop other industries in the country. This implies that small scale businesses are a crucial form for the welfare of the people. This is because most of the entrepreneurs in the area of study were previously employed by larger businesses from where they were able to secure personal savings that accumulated over time and enabled them to start up their own businesses at a small scale since these require little start-up capital.

Table 11: Challenges to the SSEs

Source: Primary Data, 2014.

From the table, 55% of the business units noted that taxes and regulations is the most challenge to their businesses these are usually so high yet they are also price takers and have no influence in determining the prices of their products. One would however recommend them to follow the law of demand and supply but still this is under the control of price flows and ceilings. Rather it would be better if the GoU revises its policies as regards business so as to ensure incentives and tax holidays are provided some products.

Competition is another limitation that is faced by the businesses. According to analysis, 19.5% of the respondents agree that this is a challenge brought about by those businesses that possess dynamic capabilities, credible with licensing, taxation and enhances their access to rationed resources such businesses can easily out-price and out-sell the small businesses thus contributing to improved performance for development. SSEs can therefore reduce on the effect of competition by networking with medium and large businesses, better infrastructure and larger markets.

Lack of storage facilities is also a limitation by the business units in Banda Parish. This is especially to those that hardly afford the costs to rent tied shops and rather resort to street retailing and hawking the fact that they have little startup capital that cannot sustain them to posses’ stores for their products. Suggestions are mostly referred to Government to improve on the infrastructural development in the form of huge stores managed by the government to be rented at subsidized amounts in the favor of the business fraternity.

Inflation contributed to 9%, this is in reference to the persistent increase in the prices of the product that the SSEs deal with. This limits their decisions on which price level to sell their products since this is attributed with high taxes. Inflation to them can only be reduced by widening the market base for the large and medium businesses abroad so as not to compete with the small scale businesses. In this way they will be generating foreign incomes that will help improve the value of a shilling against a Dollar and this will endure small scale businesses to increase in the provision of employment opportunities to the labor force.

Transportation costs with a minor percentage of 3% are attributed to poor roads for accessibility purposes in the process of widening their markets. This has increased on their costs since access to rural areas is difficult and this to the business fraternity in the area of study would only be solved by construction of better road networks to the industrialized areas where the SSEs obtain their products.

However, other solutions have been put forward in support of the small scale businesses so as to sustain their activities as they provide employment to the labor force. These included; Traditional Guarantee Associations such as PSF, Nakawa Trading center Association, 360 Network, Financial Sector Development, Market expansion and diversification, Good Governance and Human and cultural capital development

4.4 The relationship between small business enterprises and the growth of towns in Uganda:

In the process of starting a small scale enterprise has a great relationship towards the growth of towns simply because of providing employment opportunities to the labor force, that resides in these small towns. The employment opportunities created by these small scale business improves household incomes which enhances their house hold welfare. However, there are other relationships attributed to this as highlighted below;

• Equitable distribution of incomes amongst people living in small town who engage in the small scale business operations.
• Industrial developments among the different sectors of the economy are also a result of small scale initiatives.
• Poverty reduction which is a basis towards the accessibility to basic needs like food, education, housing and medical care.
• Social network in form of interrelationships keeps a wide and open mind to development through knowledge and skills development.
• Access to financial institutions to widen the capital base for the small scale businesses is also a benefit from the activities of the small scale businesses

Relationship between small business enterprises and the growth of towns in Uganda.

• Source: Primary Data, 2018.

• From the findings, there is a strong positive relationship between employment opportunities and the kind of activities done by the businesses at Pearson correlation coefficient at 0.838. This implies that for every kind of activity involved in such businesses increases on the employment opportunities generated by the businesses. For instance, each activity done in the small scale businesses is an opportunity to the labor force hence more efforts should be done to enhance their performance so as to increase on their contribution to development.