Effects of Financial Management Practices on Financial Performance of small and Medium Enterprises in Kiambu, Kenya
| dc.contributor.author | Ringera, Japhet Marangu | |
| dc.date.accessioned | 2024-04-17T12:36:48Z | |
| dc.date.available | 2020-08-28T11:27:32Z | |
| dc.date.available | 2024-04-17T12:36:48Z | |
| dc.date.issued | 2015-09 | |
| dc.description.abstract | Financial management is an important clement of the management of any business. It is a key pan of the management function focusing on the management of a business' assets. In the long term, the type of assets owned by a business charts out the direction of the business during the life of these assets. In Kenya simple management mistakes lead to the collapse of SMEs due to their poor financial management. Lack of proper financial management is one of the issues that easily lead to the collapse of SMEs despite improved access to financing. This study was therefore, designed to establish the effect of financial management practices on financial performance of small and medium enterprises: in Kiambu town in Kenya. Three variables namely Working Capital Management, Investment decisions and financing decisions [independent variables] were used to measure financial performance [dependent variable]. The study used descriptive research design utilizing qualitative data captured using a self-administered questionnaire. 100 randomly selected SMEs located in Kiambu town were used as the sample of the study. The analysis was done using frequencies. Percentages, means, regressions analysis and ANOVA. Presentation was by use of pie charts, graphs and tables. The study showed that considered individually, there is a positive relationship between working capital management; investment decisions; financial decisions and financial performance. The study showed that the combined effect of financial management practices [working capital management, investment decision, financial decision] have a moderate positive relationship between financial management practices and financial performance and that considered collectively, financial management practices contributed to 18.3% variance in financial performance. The 81.7% variance in financial performance would be attributed to other factors beyond the scope of the study. The study recommends that to enhance financial performance, the organizations [SMEs] should adopt credit policies to guide credit sales. The policies should create a balance between customer retention and adequate the cash flow. Secondly the study recommends that the government should ensure creation of favourable policy and economic environment through legislation that facilitate access to affordable sources of funding for SMEs and attract venture capitalist. Third, developing appropriate strategies and policies that enhance financial decisions will be critical for the SMEs in enhancing 'heir financial performance. Fourth, a study that covers other parts of the country with unique business environments would be welcome. Further, broadening the study scope to cover other variables of financial management practices such as activity analysis would be welcome to offer more empirical evidence on the factors that affect financial performance of SMEs. | |
| dc.identifier.uri | https://repo.pacuniversity.ac.ke/handle/123456789/3037.2 | |
| dc.language.iso | en | |
| dc.publisher | Pan Africa Christian University | en_US |
| dc.title | Effects of Financial Management Practices on Financial Performance of small and Medium Enterprises in Kiambu, Kenya | en_US |
| dc.type | Thesis |
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