An Insolvency Toolkit for SMEs in Emerging Economies—A Spotlight on Uganda

This article examines the subject of SME failures due to financial distress in emerging economies by focusing on Uganda as a case study. It adopts a convergent doctrinal and empirical approach, drawing on existing black letter law and literature alongside some of the empirical data obtained from a survey of SME business owners impacted by financial distress, a survey of accredited insolvency practitioners and exchanges from a stakeholder workshop on SME insolvencies in Uganda. The article examines existing legal, regulatory and procedural frameworks on corporate rescue and the identified gaps exacerbating SME failures in unpacking why, despite the availability of these frameworks, business rescue as the policy objective of Uganda’s insolvency law has yet to be fully achieved. The article devises a recommended toolkit that if adopted, may guide the approaches needed to improve SME rescue, and meet legal and statutory objectives of Uganda’s insolvency frameworks to enhance economic stability.