Abstract

The government of Uganda came up with the micro, small and medium enterprise policy in 2015 in an effort to support SMEs for sustainable wealth creation and social economic transformation. However, the SMEs sector has grappled with wide ranging challenges and these challenges therefore threaten the survival of SMEs. This study thus investigated factors responsible for the survival of Uganda’s small and medium businesses and was based on the records of the businesses from the survey done by the Uganda Bureau of Statistics. Business survival was measured from the year when the business started operations to the survey year, 2010. A time-to-event approach in a Cox Proportional Hazard Model was adopted in the analysis. There is a minimum of 1 enterprise and a maximum of 23 enterprises that can survive which were considered to exit operation with business survival was 4.85 years. It indicates a low survival rate of Uganda’s businesses. The rate of exit of businesses was significantly higher for businesses located in the central region, those employing a larger number of employees, those owned by non-Ugandans, those not operating as sole proprietorship and those considered not to be innovative. The findings point to a recommendation of scaling up measures aimed at ensuring that the survival levels of businesses in the country improve. 

Key words: Survival of SMEs, Uganda, business, Cox hazard model.