Governments in different parts of the world are increasingly promoting and supporting the growth of Micro and Small enterprises as part of their overall national development strategy. The sector plays an important role in economic development and act as vehicle for low-income people to escape poverty through market-driven, productive activities for growth of the economy. Consequently because of their role and significance to the economic development they have become a major research area in developing countries. Studies have been conducted highlighting the constraints which affect the growth of micro-enterprises with a view to bring to the solutions but with no in-depth. Most the enterprises growth still stagnate and eventually fail. Their failure rates are always attributed to lack of management skills by most owner managers. As a result, there is need to carry out studies on the management practices of micro enterprises in regard to financial practices. The objective of this study was to appraise the financial management practices on growth of Jua Kali enterprises in Kenya. The study adopted the descriptive research design to assess the growth in regards to financial practices. The target population was 150 owner managers of micro enterprises registered under Jua Kali enterprises. Considering the population was not a homogeneous, stratified random sampling technique was used as the most appropriate to determine the study sample of 50 respondents. The primary data was collected through structured questionnaires. The data was analysed using both descriptive and inferential statistics with the help of the Statistical Package for Social Sciences. Linear regression analysis was employed to determine the degree of relationship between the financial management practices and growth. The result showed that financial management practices had a strong positive relationship on the growth of Jua Kali enterprises with a Pearson correlations coefficient of 0.629 at 95 percent significance level (p=0.001). The study concluded that financial management practices have an influence on the growth of micro enterprise hence the need for owner managers to embrace appropriate management practices to grow their businesses that help spur economic development and create more employment, in line with Kenya’s vision 2030.
| Published in | Journal of Business and Economic Development (Volume 2, Issue 1) |
| DOI | 10.11648/j.jbed.20170201.18 |
| Page(s) | 63-70 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2017. Published by Science Publishing Group |
Employment Creation, Financial Management Practices, Micro-Enterprises Growth
| [1] | U. S. Muogbo, “The impact of strategic human resource management on small and medium sized enterprises (A study of some selected paint manufacturing firms in Anambra State Nigeria).,” Global Journal of Management and Business Studies, vol. 3(3), pp. 323-340., 2013. |
| [2] | A. S. A. a. S. D. Turyahebwa, “Financial management practices and business performance of small and medium enterprises in western Uganda.,” African journal of business management, vol. 7 (38). p. 3875., 2013. |
| [3] | S. Abduli, “Effective human resource management in small and medium size enterprises in the republic of Macedonia. International Journal of Academic Research in Economics and Management Sciences,” vol. 2, no. 2, pp. 169-183., 2013. |
| [4] | Y. A. Dauda and W. A. Akingbade, “Employee's Market orientation and business performance in Nigeria: Analysis of small business enterprises in Lagos state.,” International Journal of marketing studies, vol. 2, no. 2, p. 134, 2010. |
| [5] | L. Garay and X. Font, “Doing good to do well? Corporate social responsibility reasons, practices and impacts in small and medium accommodation enterprises,” International Journal of Hospitality Management, vol. 31, no. 2, pp. 329-337, 2012. |
| [6] | A. Mulei and C. Bokea, “Micro and small-scale enterprises in Kenya. Agenda For Improving the policy environment,” 1999. |
| [7] | E. Ronge, L. Ndirangu and H. Nyangito, “Review of Government Policies for the Promotion of Micro and Small scale Enterprises., (20).,” Kenya Institute for Public Policy Research and Analysis, KIPPRA Discussion Paper, 2002. |
| [8] | T. Abanis, A. Sunday, A. Burani and B. Eliabu, “Financial management practices in small and medium enterprises in selected districts in western Uganda. Research Journal of Finance and Accounting, 4 (2),” vol. 4, no. 2, pp. 29-42., 2013. |
| [9] | J. N. Maundu, “Towards meeting local training requirements of Jua Kali artisans in Kenya: Some lessons of experience.,” 1997. |
| [10] | National Baseline Survey, “National Micro and Small Enterprise Baseline Survey.,” 1999. |
| [11] | L. W. Kibera, “The role of small scale enterprises in socio-economic development and poverty alleviation in Kenya: a gender perspective.,” in In 7th Annual International Management Conference, 2000, December. |
| [12] | P. J. Robson, H. M. Haugh and B. A. Obeng, “Entrepreneurship and innovation in Ghana: enterprising Africa. Small Business Economics, 32 (3),.,” vol. 32, no. 2, pp. 331-350, 2009. |
| [13] | T. Abanis, A. Sunday, A. Burani and B. Eliabu, “Financial management practices in small and medium enterprises in selected districts in western Uganda,” Research Journal of Finance and Accounting, vol. 4, no. 2, pp. 29-42, 2013. |
| [14] | C. O. Longenecker and L. S. Fink, “How top-level managers develop: a field study. Development and Learning in Organizations,” An International Journal, vol. 20, no. 5, pp. 18-20, 2006. |
| [15] | K. King and S. McGrath, Globalisation, enterprise and knowledge: Education, training and development in Africa.., Symposium Books Ltd, 2002. |
| [16] | P. B. Kibas, “Entrepreneurship: Key to Kenya's Development,” A journal of the Management University of Africa, 2012. |
| [17] | J. Wiklund, H. Patzelt and D. Shepherd, “Building an integrative model of small business growth,” Small Business Economics, vol. 32, no. 4, pp. 351-374, 2009. |
| [18] | N. F. Krueger, M. D. Reilly and A. L. Carsrud, “Competing models of entrepreneurial intentions,” Journal of business venturing, vol. 15, no. 5, pp. 411-432, 2000. |
| [19] | K. N. B. o. S. KNBS, “The Economic Survey 2015,” Kenya National Bureau of Statistics, Nairobi, 2015. |
| [20] | Economic Survey, “The Economic Survey 2006,” KNBS, Nairobi, 2006. |
| [21] | M. L. Harris and S. G. Gibson, “Determining the common problems of early growth of small business in Eatern North California.,” Sam Advanced Management Journal,, vol. 71, no. 2, pp. 39-45, 2006. |
| [22] | P. Cook and F. Nixson, Finance and small and medium-sized enterprise development., Manchester: Institute for Development Policy and Management, University of Manchester, 2000. |
| [23] | H. Jay and R. Barry, Production and Operations Management, 7th ed., George Washington University. Pearson Custom Publishing. Prentice Hall., 2004. |
| [24] | A. R. Anderson, S. D. Dodd and S. Jack, “Network practices and entrepreneurial growth,” Scandinavian Journal of Management, vol. 26, no. 2, pp. 121-133, 2010. |
| [25] | N. H. Bowditch, The Last Emerging Market: From Asian Tigers to African Lions?: the Ghana, Praeger, 1999. |
| [26] | R. Pretorius and G. Shaw, “Busness plan in bank-decision making when financing new ventures in South Africa,” 2004. |
| [27] | R. Atieno, “Institutional Arrangements and the Performance of Micro and Small-Scale Clothing Enterprises in Kenya,” in CSAE conference, Nairobi, 2009. |
| [28] | O. Fatoki and F. Asah, “The impact of firm and entrepreneurial characteristics on access to debt finance by SMEs in King Williams' town, South Africa,” International Journal of Business and Management, vol. 6, no. 8, p. 170, 2011. |
| [29] | B. D. Jones, F. R. Baumgartner and J. L. True, “Policy punctuations: US budget authority, 1947–1995.,” The Journal of Politics, vol. 60, no. 01, pp. 1-33, 1998. |
| [30] | A. J. Keown, J. W. Petty, J. Martin and D. F. Scott, “Financial management: Principles and applications.,” 2005. |
| [31] | M. Jingmeng, “A Study on Working Capital Management System based on Performance,” International Journal of Innovation, Management and Technology, vol. 4, no. 1, 2013. |
| [32] | D. Stokes and N. Wilson, Small Business Management and Entrepreneurship, Cengage Learning EMEA, 2006. |
| [33] | B. Garikai, “Exportation Challenges by Small and Medium Enterprises and Possible Exportation Strategies,” 2011. [Online]. Available: http://www.articlebase.com/business-4056101.html. |
| [34] | C. Nieuwenhuizen, H. Badenhorst-Weiss, D. Rossouw, T. Brevis and M. Cant, Business management: A contemporary approach., Juta and Company Ltd., 2008. |
| [35] | L. Kirsch, “Deploying Common Systems Globally: The Dynamics of Control,” Information Systems Research, vol. 15, no. 4, pp. 374-395, 2004. |
| [36] | A. Omri and M. Frikha, “How entrepreneurs identify opportunities and access to external financing in Tunisian's micro-enterprises?,” African Journal of Business Management, vol. 6, no. 12, p. 4635, 2012. |
| [37] | P. D. Leedy and J. E. Ormrod, Practical research: Planning and design, New Jersey: Prentice-Hall, 2001. |
| [38] | E. R. Babbie, Survey Research Method, Wadsworth Publishing Company, 1990. |
| [39] | J. W. Creswell, Research design: Qualitative and mixed methods approaches.., London and Thousand Oaks: Sage Publications, 2009. |
| [40] | M. Saunders, P. Lewis and A. Thornhill, Research Methods for Business Students, Financial Times/Prentice Hall, 2007, 2007. |
| [41] | D. K. Kombo and D. Tromp, “Proposal and thesis writing: An introduction. Nairobi,” Pauline’s Publications Africa, 2006. |
| [42] | O. Mugenda and A. Mugenda, Research Methods: Quantitative and Qualitative Approaches, Nairobi: Acts Press,. 1999. |
| [43] | C. R. Kothari, Research Methodology: Methods & Techniques, (Second Revised Edition), New Age International Publishers, New Delhi, 2009. |
| [44] | N. Indarti and M. Langenberg, “Factors affecting business success among SMEs: Empirical evidences from Indonesia,” second bi-annual European Summer University, p. 19, 2004. |
| [45] | M. Muijis, “Doing Quantitative research in education.,”. London, UK: Sage Publication, 2004. |
| [46] | D. Nassiuma, “Survey Sampling; Theory and Methods.,” Nairobi: Nairobi University Press.. 2000. |
| [47] | I. o. C. P. A. o. K. ICPAK, “Annual Report and Financial Report,” Institute of Certified Public Accountants of Kenya, Nairobi, 2010. |
| [48] | G. o. K. GOK, “Small business -- Government policy - Kenya.,” National government publication, Nairobi, 2005. |
| [49] | C. M. V. P. S. Green, “Company Financial Structure: A Survey and Implications for Developing Economies. In Green,. J, C, Kirkpatrick, H, C, Murinde, eds, V (ed) Finance and Development: Surveys of Theory, Evidence and Policy, Edward Elg,” vol. 39, no. 3, pp. 356-429, 2005. |
| [50] | E. R. Babbie, The Practice of Social Research, 14th ed., Cengage Learning, 2015. |
APA Style
David M. Kahando, Tirus Muya Maina, Charity Mweru Maina. (2017). An Appraisal of Financial Management Practices on the Growth of Micro Enterprise in Kenya. Journal of Business and Economic Development, 2(1), 63-70. https://doi.org/10.11648/j.jbed.20170201.18
ACS Style
David M. Kahando; Tirus Muya Maina; Charity Mweru Maina. An Appraisal of Financial Management Practices on the Growth of Micro Enterprise in Kenya. J. Bus. Econ. Dev. 2017, 2(1), 63-70. doi: 10.11648/j.jbed.20170201.18
Share This Article
Twitter
Linked In
Facebook
Copy
Download@article{10.11648/j.jbed.20170201.18,
author = {David M. Kahando and Tirus Muya Maina and Charity Mweru Maina},
title = {An Appraisal of Financial Management Practices on the Growth of Micro Enterprise in Kenya},
journal = {Journal of Business and Economic Development},
volume = {2},
number = {1},
pages = {63-70},
doi = {10.11648/j.jbed.20170201.18},
url = {https://doi.org/10.11648/j.jbed.20170201.18},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20170201.18},
abstract = {Governments in different parts of the world are increasingly promoting and supporting the growth of Micro and Small enterprises as part of their overall national development strategy. The sector plays an important role in economic development and act as vehicle for low-income people to escape poverty through market-driven, productive activities for growth of the economy. Consequently because of their role and significance to the economic development they have become a major research area in developing countries. Studies have been conducted highlighting the constraints which affect the growth of micro-enterprises with a view to bring to the solutions but with no in-depth. Most the enterprises growth still stagnate and eventually fail. Their failure rates are always attributed to lack of management skills by most owner managers. As a result, there is need to carry out studies on the management practices of micro enterprises in regard to financial practices. The objective of this study was to appraise the financial management practices on growth of Jua Kali enterprises in Kenya. The study adopted the descriptive research design to assess the growth in regards to financial practices. The target population was 150 owner managers of micro enterprises registered under Jua Kali enterprises. Considering the population was not a homogeneous, stratified random sampling technique was used as the most appropriate to determine the study sample of 50 respondents. The primary data was collected through structured questionnaires. The data was analysed using both descriptive and inferential statistics with the help of the Statistical Package for Social Sciences. Linear regression analysis was employed to determine the degree of relationship between the financial management practices and growth. The result showed that financial management practices had a strong positive relationship on the growth of Jua Kali enterprises with a Pearson correlations coefficient of 0.629 at 95 percent significance level (p=0.001). The study concluded that financial management practices have an influence on the growth of micro enterprise hence the need for owner managers to embrace appropriate management practices to grow their businesses that help spur economic development and create more employment, in line with Kenya’s vision 2030.},
year = {2017}
}
TY - JOUR T1 - An Appraisal of Financial Management Practices on the Growth of Micro Enterprise in Kenya AU - David M. Kahando AU - Tirus Muya Maina AU - Charity Mweru Maina Y1 - 2017/01/16 PY - 2017 N1 - https://doi.org/10.11648/j.jbed.20170201.18 DO - 10.11648/j.jbed.20170201.18 T2 - Journal of Business and Economic Development JF - Journal of Business and Economic Development JO - Journal of Business and Economic Development SP - 63 EP - 70 PB - Science Publishing Group SN - 2637-3874 UR - https://doi.org/10.11648/j.jbed.20170201.18 AB - Governments in different parts of the world are increasingly promoting and supporting the growth of Micro and Small enterprises as part of their overall national development strategy. The sector plays an important role in economic development and act as vehicle for low-income people to escape poverty through market-driven, productive activities for growth of the economy. Consequently because of their role and significance to the economic development they have become a major research area in developing countries. Studies have been conducted highlighting the constraints which affect the growth of micro-enterprises with a view to bring to the solutions but with no in-depth. Most the enterprises growth still stagnate and eventually fail. Their failure rates are always attributed to lack of management skills by most owner managers. As a result, there is need to carry out studies on the management practices of micro enterprises in regard to financial practices. The objective of this study was to appraise the financial management practices on growth of Jua Kali enterprises in Kenya. The study adopted the descriptive research design to assess the growth in regards to financial practices. The target population was 150 owner managers of micro enterprises registered under Jua Kali enterprises. Considering the population was not a homogeneous, stratified random sampling technique was used as the most appropriate to determine the study sample of 50 respondents. The primary data was collected through structured questionnaires. The data was analysed using both descriptive and inferential statistics with the help of the Statistical Package for Social Sciences. Linear regression analysis was employed to determine the degree of relationship between the financial management practices and growth. The result showed that financial management practices had a strong positive relationship on the growth of Jua Kali enterprises with a Pearson correlations coefficient of 0.629 at 95 percent significance level (p=0.001). The study concluded that financial management practices have an influence on the growth of micro enterprise hence the need for owner managers to embrace appropriate management practices to grow their businesses that help spur economic development and create more employment, in line with Kenya’s vision 2030. VL - 2 IS - 1 ER -
Information
Email: