Browsing by Author "Muchira, Bancy Wawira"

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    Effects of Entrepreneurial and Firm Characteristics on Access to Venture Capital by Small and Medium Enterprises in Nairobi City County, Kenya
    (Kenyatta University, 2019) Muchira, Bancy Wawira
    Small and medium Enterprises are vital for economic growth especially in the developing countries. However, empirical evidence shows that most of these enterprises fail due to poor/lack of access to finance. Access to venture capital by the small and medium enterprises could be a plausible alternative but unfortunately research has pointed out that majority of the enterprises do not access venture capital financing, which is considered an important option for small and medium enterprises trying to grow. This study therefore sought to investigate the effect of entrepreneurial and firm characteristics on access to venture capital by small and medium enterprises in Kenya. The study was guided by the following specific objectives; To determine the effect of entrepreneur‟s innovativeness on access to venture capital, to establish the effect of entrepreneur‟s managerial competency on access to venture capital, to determine the effect of firm‟s age on access to venture capital, to establish the effect of firm‟s sector of operation on access to venture capital, to determine the mediating effect of firms performance on the relationship between entrepreneurial and firm characteristic and access to venture capital and lastly to determine the moderating effect of risk reduction strategies on the relationship between entrepreneurial and firm characteristics on access to venture capital by Small and medium size enterprises in Kenya. Agency theory underpinned the study. The study adopted the explanatory non experimental research design and positivism philosophy guided the study. Target population of the study was 334 Small and medium size enterprises ranked by KPMG between 2008 and 2017 in their annual survey. Proportionate random sampling technique was used to select the firms. Primary data was collected by semi structured questionnaire, using drop and pick method. Both descriptive statistics and inferential statistics were used to analyze the data. Nested multinomial logit model was used to establish the effect of entrepreneurial and firm characteristic on access to venture capital financing. The results reveal that; the influence of an entrepreneur‟s innovativeness on access to venture capital financing is statistically significant. Secondly, managerial competency had positive influence and was statistically significant to access to venture capital financing among SMEs. Third, the results show that SMEs in the service industry benefits more from venture capital as opposed to those in the non-service industry. Fourthly, the results show that a firm‟s age has a positive though statistically insignificant influence on access to venture capital financing. Fifth, there is no mediating relationship between a firm‟s performance on the relationship between entrepreneurial and firm characteristic and access to venture capital financing. Finally, there exists a moderating relationship between entrepreneurial and firm characteristic on access to venture capital financing. From the findings, a number of recommendations can be made. First, SMEs should continue investing in enhancing entrepreneurial innovativeness as it increases the propensity of their enterprises from accessing venture capital financing. Secondly, given that managerial competency positively affects SMEs access of venture capital financing, firms should invest in human capital of their management through various strategies. For instance, investing in training gives employees the opportunity to develop new skills and accumulate the knowledge they need in order to achieve specific organizational and personal goals with the priority being to train managers so that they can be able to cope with the challenges which hinder business success.
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    Prudential Regulations and Financial Performance of Microfinance Banks in Kenya
    (The Strategic Journal of Business & Change Management, 2024-03) Muchai, Grace Wanja; Muchira, Bancy Wawira
    As financial intermediaries, microfinance banks are crucial. The growth of an economy is significantly influenced by microfinance institutions’ financial performance, in addition to their function in intermediation. The prudential guidelines and financial health of Kenyan microfinance banks were examined in this study. The precise objectives looked on how credit, capital adequacy, and liquidity regulations affected Kenyan banks’ financial performance. Lastly, the researchers looked into how the microfinance institutions’ size impacts prudential regulations and financial performance. The study was grounded in the theories of stakeholders, capital buffer, and liquidity management. The sample approach used was census sampling, and the research design was explanatory. The 13 MFBs that made up the target population and are accredited by the Central Bank of Kenya produced audited financial statements and yearly reports, which provided secondary data. Normality, multicollinearity, stationary, autocorrelation, heteroscedasticity, and diagnostic tests were performed on the data. Additionally, multiple regression analyses, correlation analyses, and descriptive statistics were carried out. The results showed that capital adequacy regulations significantly influenced MFBs' financial performance, highlighting the importance of maintaining sufficient core capital. However, liquidity regulations did not significantly impact performance, suggesting customer deposit ratios may not be a critical factor. Credit regulation, specifically non-performing loans, had a significant negative impact, highlighting the importance of effective credit management. The association between performance and prudential regulations is not affected by MFB size. These findings highlight the importance of targeted and effective regulatory measures in the microfinance sector
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    Record Keeping and Growth of Micro and Small Enterprises, A Case Study of Thika Municipality in Kenya
    (2013-08-27) Muchira, Bancy Wawira
    Despite the effort made by the government of Kenya to support the growth of MSE sector by creating enabling environment through appropriate legal and regulatory procedures, and in spite the fact that banks have recently made micro-credit accessible to MSEs (MESPT, 2011), there is no indication that the sector is growing. Research has shown that sixty percent (60%) of MSEs fail within few months of their operation (Bowen, 2009). Furthermore research has also confirmed that poor or lack of recordkeeping in a business and especially the Small enterprises lead to their collapsing (Germaain 2010). This research was therefore set to investigate the extent to which the owners or managers of Micro and Small Enterprises kept records in their businesses. For the success of MSEs accurate records of business transactions need to be kept. The qualitative method was used to achieve the following study objectives: (i) To find out types of records the MSEs keep of their business operations, (ii) To find out the challenges faced by the MSEs entrepreneurs in recordkeeping, (iii) To find out the attitude of the MSEs operators towards recordkeeping in their enterprises and (iv) To establish the extent to which recordkeeping support operation and growth of the MSEs. The target population of the study was the owners or managers of MSEs in Thika municipality. This study adopted a form of qualitative descriptive research, the case study design. The study used both purposive and random methods to sample the respondents. It was envisaged that the findings, recommendations and suggestion of this study would be helpful to entrepreneurs, policy makers and the sponsors of the MSEs sectors. The found out that the MSEs do not keep complete accounting records because of lack of accounting knowledge and the cost of hiring professional accountants. As a result, there is inefficient use of accounting information to support financial performance measurement by MSEs. This made it difficult for the entrepreneurs to calculate their business profit efficiently. Lack of keeping of accurate records was highly blamed on the lack of skills in this field by the owners or managers. The study further revealed that the owners and managers of MSEs were highly willing to learn more about how to keep accurate records of their business transactions. Following this, the study recommended that the ministry concerned should come up with an efficient programme for training the MSEs entrepreneurs. Additionally, the research recommends that a policy be made to make it mandatory for the MSEs owners/mangers to keep records of their business transactions. This will help in terms of the management of the MSEs and at the same time assist when it comes to issues of taxation.