Determining the extent of Financial Planning and Performance of Small Scale Enterprises (SSEs) in Kisii Town, Kenya
Journal Title: International Journal of Finance Accounting and Economics - Year 2018, Vol 1, Issue 3
Abstract
Small Scale Enterprises (SSEs) are very important in the business environment of any country in terms of employment creation, poverty reduction and contribution to economic growth. In Kenya, they employ over 80% of the unemployed population which is largely women and the youth and contribute up to 18.4 % of the country’s Gross Domestic Product (GDP). Despite their importance, they are faced with the threat of failure with past statistics indicating that 60% fail within the first few months of operation. Proper financial planning is vital in any business enterprise. The extent to which financial planning determines performance of SMEs has not been clearly understood. This study aimed at determining the extent to which financial planning affects the performance of small scale enterprises in Kisii town. The study used a descriptive survey research design where the respondents were selected through stratified and purposive random sampling techniques. A sample size of 93 out of 1224 target population, respondents was used. Data was collected by use of a questionnaire, edited, summarized and coded for ease of classification and analyzed using computer software. Descriptive statistics especially, frequencies and percentages were applied to make it easier for the researcher to understand and interpret implications of the findings. Presentation and reporting was in form of frequency tables, pie charts and bar graphs. A Pearson’s correlation coefficient was used to establish the relationship between financial planning and financial performance. It was revealed that there is a strong positive relationship between Financial planning and business Performance at Pearson correlation coefficient r=0.894. It was recommended that the Central government through the Ministry of Trade Commerce and Industry in collaboration with the County government of Kisii provide training programs, through seminars and workshops, in financial planning for Small Scale Enterprises to improve the extent of use of financial planning in their businesses.
Authors and Affiliations
Tom Mokweri Nyamache, Moses Arisa Moturi
Keywords
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