Financial Management Practices of Micro and Small Enterprises in Kenya: the Case Study of Kibera Nairobi
Abstract
Micro and Small enterprises play a vital role in the Kenyan economy either
as an increasing employer or as a contributor to the gross domestic
product.
This research study was carried out in Kibera, Nairobi. It is a survey of the
Financial Management practices of failed and practicing small enterprises.
A structured questionnaire was administered to the respondents from the
'failed' and 'successful' businesses.
The respondents were the proprietors or owners of the selected MSEs. The
questionnaires were designed in line with the objectives of the study and
used in the face to face interview. Most of the 'failed' MSEs were below
five years and did not have formal financial management practices.
Education status was a major influence in formal financial practices.
Only about half of the existing MSEs were below five years. More than
half adopted formal financial management practices with the majority
having more education exposure.compared to the 'failed' MSEs. A myriad
of challenges including, high competition, low customer purchasing power,
inadequate capital and high cost of living were encountered by both failed
and practicing MSEs.
The conclusion reached after the analysis was that education, formal
training and consultancy services are crucial for adoption of financial
management practices, survival and the entire business success
Citation
Master of Business AdministrationPublisher
University of Nairobi School of Business, University of Nairobi