FINANCIAL MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF SELECTED SMALL AND MEDIUM ENTERPRISES IN MOMBASA COUNTY, KENYA
FINANCIAL MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF SELECTED SMALL AND MEDIUM ENTERPRISES IN MOMBASA COUNTY, KENYA
Okeyo Omondi Kennedy - Masters Student, Kenyatta University, Kenya
Samson Kaplelach - Lecturer, Kenyatta University, Kenya
ABSTRACT
Most business enterprise depends on financial management practices to be successful, it is an integral part of an organization concentrating on the controlling of affairs of any enterprise. Most Small and Medium Enterprises collapse because of lacks capacity to establish proper and comprehensive management of finance. Findings obtained from previous studies have been inconclusive. Effects of financial management practices on the financial performance of selected SMEs in the county of Mombasa, Kenya was the main objective of this study while the specific objectives were as follows; to determine the effects of financing practices, investments practices, and Liquidity practices on the financial performance of selected SMEs in Mombasa County, Kenya. The design of this study was Descriptive research while the population targeted for the research was 206 respondents from selected SMEs in Mombasa County. A sample of 62 respondents was chosen using stratified sampling method, out of which 60 filled and returned the questionnaire. . Multiple regression model was specifically used to analyze the study-specific objectives and results summarized using frequency distribution tables, mean scores and standard deviations with the help of statistical package for social science (SPSS). All SMEs were found to have incorporated financial management practices in their operation. The study concludes that majority of SMEs financial performance are affected by financial management practices. The study recommended to entrepreneurs to give priority to financial management practices when coming up with operation strategies. It has also recommended to policy maker to initiate policies to alleviate existing SMEs so that new employment opportunities for its population through public awareness using the findings of this study to assist both the current and upcoming enterprises so that they can realize their full potential. Lastly it has recommended to researchers to carry out further study with the use of all unused variables.
