REGULATIONS AND GROWTH OF MICRO ENTERPRISES IN KAMPALA CITY AUTHORITY, UGANDA; A CASE STUDY OF KAWEMPE MUNICIPALITY

Abstract

This study investigated the effect of regulations on the growth of micro enterprises (MEs) in Kampala, an area that has received little attention from researchers. The study specifically set out to establish the effect of formal entry regulations, property regulations and labour regulations on the growth of MEs in Kampala. A cross sectional descriptive research design was used to gather data for this study using 30 questionnaires, 10 interviews and various documents. Findings from the study revealed that formal entry regulations have a significant effect on the growth of micro enterprises and these regulations in Uganda are characterised by high entry cost and limited knowledge about them from micro entrepreneurs. Findings further showed that property registration regulations have no significant effect on the growth of micro enterprises because the property rights of most of the micro entrepreneurs are not protected by national laws. It was also evident from the study findings that labour regulations in Uganda have no significant effect on the growth MEs since their compliance is not enforced by government. The study concludes that not all regulations in Uganda have a significant effect on the growth of MEs and that the existing formalisation regulations, property rights laws and labour regulations are not sensitive to the growth needs of MEs. This study recommends that for growth of MEs, there is need for reforms to make formal entry regulations less costly and widely known to micro entrepreneurs. There is also need for reforms to protect the property rights of poor micro entrepreneurs. Lastly, there is need for government to make labour regulations that are sensitive to the growth needs of MEs and at the same time enforce compliance to these regulations by MEs.