FINANCIAL MANAGEMENT PRACTICES AND TURNOVER GROWTH OF MICRO AND SMALL ENTERPRISES: A CASE OF UWEZO FUND IN KWALE COUNTY, KENYA
Moses Ogendi Mogaka - Master of Business Administration (Finance), Kenyatta University, Kenya
Dr. Jeremiah Koori - Lecturer, Department of Accounting and Finance, School of Business, Kenya
ABSTRACT
Empirical attestation, economic evidences and industrialization practices have established the immense contributions of Micro and Small Enterprises (MSEs) in developed nations and the continuous acceleration of economic growth among developing countries. The government of Kenya had been increasing funding of small enterprises through escalation of Uwezo fund as was evidenced from annual budgetary allocations by the national treasury. Out of the Ksh.5.161 billion of Uwezo Fund that had been disbursed since the year 2013, nationally, ksh.91.6 million of the disbursement was channelled to Kwale County. Despite the disbursement, the turnover growth of MSEs in Kwale County had only been a mere 5 per cent. This is far much less than the expected turnover growth of 15 per cent given the huge investments by the fund. This study examined the effect of financial management practices on turnover growth of micro and small enterprises in Kwale County, Kenya. Specifically the study draws on financing decisions, investment decisions, working capital management decisions, profit distribution decisions and how they influence turnover growth of such MSEs. A descriptive survey method of research was employed in conducting the study. The study population were the 911 registered MSEs that have received a financing facility from Uwezo Fund in Kwale County. Stratified random sampling was applied to choose the sample size which translated to 270 MSEs managers. Structured questionnaire was used to gather data from the respondents. The data obtained was analysed for ANOVA, regression analysis, and descriptive statistics. SPSS computer software was utilised in data coding and analysis. The results indicate that financing decisions had a moderate significant positive correlation with turnover growth of MSEs. Investment decisions had a fairly strong and significant positive correlation with turnover growth. Working capital management had a strong positive correlation with turnover growth of MSEs in Kwale County while profit distribution had a week positive correlation with turnover growth of MSEs in Kwale County.
