| dc.description.abstract | The challenge of cash flow for small contractors is well documented. Besides management related challenges, lack of capital, limited access to credit, payment delays and lack of proper regulatory framework has bedeviled the capacity of small contractors to have sustainable cash flow. This study therefore sought to analyze cash flow challenges from mobilization phase to closure of a project and the extent of their impact on project performance, assess the impact of payment delays on project operations, identify and analyze challenges of accessing financing from established institutions and to explore the creation of trust fund accounts, mobilization payments and construction banks as alternative solutions.
To address the objectives, the study hypothesized that cash flow challenges were significant at mobilization and implementation phase and have a direct bearing on project performance while establishment of trust fund accounts between clients, contractors and financial institutions will significantly reduce cash flow challenges for small contractors.
The study targeted firms registered under NCA6, NCA7 and NCA8 where a structure questionnaire was sent to 381 firms from which 239 responses were received representing a response rate of 62.7 percent. The study employed a descriptive research design in order to meet its objective. To evaluate the significance of cash flow challenges from mobilization phase to closure and the extent of their impact on project performance, frequency and mode were analyzed against a four to five point likert scale ranging from not a challenge to major challenge while correlation analysis was undertaken to establish their impact on project performance. Further, a Chi-square test was undertaken to establish the extent to which cash flow challenges vary from mobilization to closure.
Analysis was undertaken to establish the impact of payment delays on project performance, challenges of accessing funding from established financial institutions and the creation of trust fund accounts, mobilization payments and construction banks as alternative solutions. The study found that cash flow challenges were more significant at mobilization (τ =0.928, p=0.000) and implementation (τ =0.655, p=0.000) phase and to an extent at closure (τ =0.594, p=0.000). It was also established that cash flow challenges have a direct bearing on project performance given their impact on project operations such as project delays (τ =0.795, p=0.000), defaulting payments (τ =0.626, p=0.000) and declining new contracts (τ =0.548, p=0.000). | en_US |
