Sources of finance for Nairobi based "Jua Kali" business firms
Abstract
This study sought to find out the problems
facing Jua Kalil businessmen in raising finance
and the sources that they use to raise finance.
The need for this study arose from the fact that
small business firms like the "Jua Ka Li." businesses
cite lack of finance as the major constraint
hampering their growth.
In order to achieve the objectives, primary
data was collected from "Jua Kali" businessmen
operating in the Eastlands region_ of Nairobi.
This was accomplished through the use of a questionnaire
which 'vas addressed to the own er-s of
these business firms and administered by the researcher.
Data anaTysis revealed that most "Jua Kali"
businesses are started on an individual basis
through personal savings. The analysis also
found that the major constraint facing "jua Kali"
businesses is lack of adequate capital and once
the initial capital problem has been overcome
they can almost sustain themselves through the
use of retained earnings,. Retained earnings was
found to be the most important source used to
finance over 75 per cent'of the entire working
capital needs of these enterprises. Lack of
market was also found to be another cause of
lack of finance after "Jua Kali'' businesses
are operational.
On the whole, the study found that
Jua Kali business firms suffer from inadequate
institutional financing principally because of
lack of collateral to pledge.
Citation
Master of Business AdministrationPublisher
School of Business, University of Nairobi