Effects of Access to Credit on Financial Performance of Small and Meduim Enterprises in Nairobi County.
Abstract
SMEs have been perceived as being extraordinary supporters of the Kenyan economy
offering both stage and employment for inventive thoughts. They shape a bigger level
of the organizations that work in Kenya when contrasted with their partner, the
substantial organizations. However, their performance and growth is normally
hindered with various challenges. One of the principle limitations that have been
featured throughout the years is the financial constraints. Finance requirement is of
central significance for the accomplishment of any firm, be it enormous or little. The
reason for this study was to examine the effect of credit access on financial
performance of SMEs in Nairobi County. Three main factors, namely firm size, loan
amounts, access to credit and financial performance were explored in this research.
Questionnaire and interviews were used to collect primary data while journals, books
and internet were sources for secondary data. The data covered a period of five years
ranging from the year 2012 to 2016. The regression model has an R of 0.724 which
indicates a strong positive relationship between the variables. The coefficient of
determination, R square indicates how well data fits in the statistical model; how
successful the fit is in explaining the variation of the data. In this model, 52.4% of the
variations in the dependent variable are explained by the independent variables his
study serves as a reminder for them to offer financial services that are all inclusive
and be more and more SMEs‟ sensitive. Through creating an enabling environment
for SME the bridge that exists between large and small companies can be narrowed
down. This can also be achieved through segmenting NSE for SMEs‟ listing and
formulating regulatory framework that is SMEs friendly.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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