Financial Literacy as a Tool of Business Transformation for Small and Medium Enterprises in Uganda
Majority of the businesses in developing countries, Uganda inclusive fall under Small and Medium Enterprises. They employ the largest part of the population and contribute to livelihood improvement and sustainability. SMEs thus play a significant role in economic growth and development of the economy. This brief presents what limits the performance of SMEs and recommends the possible policy measures that can be adopted to transform SMEs in Uganda citing financial literacy as the key general strategy to SME transformation. The limitations to SME growth highlighted include shortage of capital and credit facilities, limited skilled labour, inadequate raw materials, poor infrastructure, inefficient management skills, and the contained use of new, emerging, and constantly changing technologies. The brief recommends training of SME owners in budgeting and expenditure management, creation of periodical awareness on debt management for SMEs, establishing policies that would encourage and promote a positive saving and investment culture, preparing and distributing Bookkeeping user guiding manuals customized in local languages such that SME owners can use them to learn effective and efficient book keeping for their records, periodically scheduling trainings for SME owners particularly to understand their legal financial obligations such as taxes and organizing massive campaigns for SME awareness on earnings maximization and business sustainability.