| dc.description.abstract | Small and medium enterprise faces a lot of challenges in their operation. These challenges range from credit rationing, insufficient finance, lack of accurate documentation, lack of collateral, regulations, and high interest rates. These challenges have a lot of impact on growth, profitability and financial innovation. The study seeks to establish financial challenges facing SMEs and their financial performance implications.
The study was conducted through cross sectional survey design with a target population of 11,844 SMEs operating in Kisumu city. Systematic sampling was done in order to come up with a representative sample to eliminate bias. The study took four (4) months and data was collected through close ended questionnaire developed in likert scale and analyzed through descriptive statistic in accordance with the objective of the study.
The study found that, lack of finance and limited access to credit, high interest rates and new laws and regulation are the major financial challenges facing SMEs in Kisumu City. These challenges have implications on growth, profitability and financial innovations. Based on the findings above, the study concluded that there are three major financial challenges facing SMEs in their operation. These financial challenges have a lot of influence in performance of SMEs. The challenges influence performance in terms of growth, profitability and financial innovation.
The study will lay a strong foundation for SMEs to better manage their financial challenges in order to improve performance in terms of growth, profitability and financial innovation. It will also assist the government to come with policy framework to mitigate challenges faced by SMEs to facilitate performance of the sector. The government should also provide policy infrastructure geared towards increasing accessibility of fund to improve survival and living standard of Kenyan citizenry. | en_US |
