Leveraging FDI to Increase SME Access to Finance in Africa: A Case Study of Uganda
This study explores the potential for adoption of business-to-business (b2b) financing as an alternative to formal finance. The main objective of the study was to determine how FDI firms (TNCs) in Uganda can be leveraged to expand supply of finance to SMEs. The specific objectives were to: establish the patterns of adoption of b2b financing and determine the factors responsible for levels of adoption; assess the potential for SMES to leverage on FDI firms for increased adoption of b2b financing; assess the effect of entrepreneur perceptions and local business culture on adoption of b2b financing; determine the barriers to increased adoption b2b financing; and lastly determine and assess policy options to promote increased uptake of b2b financing. Two surveys, one of TNCs and another of SMEs complimented with case studies were conducted to obtain necessary data. Analysis employed mainly correlations and regression tests.