INFORMAL FINANCES AND PERFORMANCE OF WHOLESALE AND RETAIL BUSINESSES IN KENYA
Mutie Juliet Mwende - School of Business, Jomo Kenyatta University of Agriculture and Technology, Kenya
Prof. Willy Muturi - School of Business, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Agnes Njeru - School of Business, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
In Kenya most businesses do not have enough internal finances to re-invest in their businesses and therefore they seek external finances which they obtain from various sources and it is not clear which source of finance contribute most to their improved performance and hence this study. Purposely this study was to determine the effect of sources of finance on the performance of wholesale and retail businesses in Kenya. The specific objective was to establish the effect of informal finances on performance of wholesale and retail businesses in Kenya. The population of the study was all the 1.56 Million businesses in Kenya. The target population of the study was 510,000 licensed businesses in the selected counties. The accessible population was the 310,000 licensed businesses in the six selected counties by operational wholesale and retail trade. Simple random techniques were used to collect a sample of 384 respondents. Secondary and primary data was used to provide information which was quantitative or qualitative. Through a structured questionnaire data was collected and these questionnaires were dropped and later picked as the method gave respondents enough time to think about their responses carefully without interference. Determining of the reliability of the questionnaire was done by using Cronbach Alpha. The study made use of Statistical Package for Social Sciences (SPSS) version 22.0 to aid in coding, entry and analysis of quantitative data. By using regression and correlation analysis data was analyzed and this helped to test the connection between the independent and dependent variables. Data was analyzed by use of descriptive and inferential statistics and then presented through figures, tables, percentages, arithmetic means, standard deviations and tabulation to show differences in frequencies. The findings of the study revealed that there was a statistical significant relationship between the independent variables and the dependent variable. Although Informal financing had a positive relationship with performance, use of Shylocks was not common with most of the businesses due high interest rates that was charged. The study concluded that there was no one source of finance that fully contribute to the performance of the businesses in Kenya. The study recommended further research to be conducted to determine the other factors that influence performance of businesses other than the sources of finance.
