The Effect of Loan Repayment Frequency on the Cash Flows of Smes in Kanduyi Constituency Kenya

Abstract

This study sought to investigate the effect of loan repayment frequency on the cash flows of SMEs in Kanduyi constituency in Bungoma County. The objective of the study was to determine how frequency of loan repayment affects the business cash flows of SMEs in Kanduyi constituency, Bungoma County. The research design that was adopted in this study was the quantitative survey design. The study employed regression analysis of data collected in the study. The Statistical Package for Social Sciences (SPSS) was used to analyze data. The study revealed that frequency of loan repayment does not have a significant effect on the cash flows of SMEs. Majority 67.39% indicated that frequency of loan repayment does not affect SMEs‟ cash flows. Only 32.61% agreed that frequency of loan repayment affects SME‟s cash flows. The loan amount and business sector does not have a significant effect on the cash flows of SMEs. The study, however, found out that age of business has a significant effect on the cash flows of SMEs. In conclusion, the study found out that SMEs could choose to repay the loans either on weekly basis or monthly. The frequency of loan repayment has no significant effect on the cash flows of SMEs.