| dc.description.abstract | Interest in the role of small and medium-sized enterprises (MSEs) in the development
process continues to be in the forefront of policy debates in developing countries and
considerable attention has been paid in the last decade to the problem of poverty reduction
in these countries (World Bank, 1997).
The study used a sample drawn from the 1999 baseline survey of micro and small scale
enterprises in Kenya to analyze the relationship between the financing behavior of these
enterprises and their performance within the framework of sources of funds for MSEs
and performance indicators. The study provides a descriptive detail of financial structure
of what can be said to possibly be the "typical" financial structure of micro and small
firms in Kenya. A range of variables, which influence the performance of MSEs have
been be explored. Some of the variables considered include, the type of trade, age of
the business, profit (as viewed by the business owners), sales growth, asset structure
and size (measured by the number of employees).
The study found that MSEs financed by internal funds perform better than those with
debt in their financial structure. Secondly, whenever the firms have utilized debt, shortterm
debt has been preferred to long-term debt.
All in all, the study finds that a relationship exists between financial structure of MSEs
and their performance. | en |
