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Debtor Management and Financial Performance of Hardware SMEs in Mukono Municipality, Uganda

Author

Listed:
  • Isaac Peter OTAI

    (Department of Accounting, Finance and Microfinance, School of Management and Entrepreneurship, Kyambogo University, Kampala, Uganda)

  • Barbara Deborah Erima BIRUNGI

    (Department of Accounting, Finance and Microfinance, School of Management and Entrepreneurship, Kyambogo University, Kampala, Uganda)

Abstract

Debtor management is a critical determinant of the financial health of small and medium-sized enterprises (SMEs). This study examined the effect of debtor management on the financial performance of hardware SMEs in Mukono, Uganda. Using Yamane’s (1967) formula at a 95% confidence level, a representative sample of 55 SMEs was determined. A stratified random sampling technique was employed to ensure coverage across municipality divisions, with a proportionate selection of respondents. Using a descriptive and correlational design, data was collected from owners, managers, and accounts staff through structured questionnaires and analysed using descriptive and regression techniques. Findings revealed that debtors’ management practices (debt collection practices and debtors turnover) positively and significantly influence financial performance (liquidity and profitability). The study concludes that effective debtor management enhances financial performance and sustainability in the hardware sector. It recommends that SMEs strengthen credit policies, adopt robust collection mechanisms, and train staff in receivables management to improve performance.

Suggested Citation

  • Isaac Peter OTAI & Barbara Deborah Erima BIRUNGI, 2026. "Debtor Management and Financial Performance of Hardware SMEs in Mukono Municipality, Uganda," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 6(12), pages 52-62, December .
    • Handle: RePEc:ahd:journl:v:6:y:2026:i:12:p:52-62
    DOI: 10.37945/cbr.2025.12.06
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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