Browsing by Author "Njagi, Joram Nyaga"

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    Financial Inclusion and Performance of Top 100 Small and Medium Enterprises in Kenya
    (Kenyatta University, 2024-10) Njagi, Joram Nyaga
    Access to services such as credit, insurance, and savings enables SMEs to invest in growth, innovation, and operational efficiency. SMEs leveraging financial inclusion can enhance their revenue generation, cash flow management, and overall profitability. However, despite these benefits, many SMEs do not fully capitalize on available financial services due to barriers such as high interest rates, insufficient financial literacy, and limited access to formal banking systems. Particularly, SMEs in Kenya face significant performance challenges with three out of five SMEs fail within the first three years of operation. This high failure rate is attributed to various factors, including poor financial management, limited access to capital, and high competition. The study therefore sought to find out what impact finance inclusion has had on the performance of Kenya's top100 SMEs. The study focused on the investments made by 100 of Kenya's biggest undertakings into micro savings, micro credit, micro insurance and digital banking. This study was guided by finance intermediation theories, technology acceptance theory, TAM signal theory and pecking order theory. The study was carried out on the basis of a descriptive research design. The target population consisted of top 100 medium size enterprises in Kenya as shown in the annual survey carried out by KPMG and nation media group in the years 2020. Respondents ware financial officers from Kenya's top 100 mid-sized companies. Stratified sampling was used to interview respondents based on company category. Respondents were selected using a purposeful selection process. Data was collected using structured questionnaire. A pilot survey was conducted with 10 respondents, but the final survey did not include these respondents. Validity of research instruments was measured using content validity. The assessment of the reliability of these questionnaires was performed using a Cronbach's Alpha quality coefficient. Descriptive statistics was used according to the modes and standards of deviation in order to analyse qualitative data. Correlations analysis and a number of regression analyses was used to determine relationships between the variables. Tables and figures were used to present findings of the study. The study examined the effects of micro savings, micro credit, micro insurance, and digital banking on the performance of Kenya's top 100 SMEs, revealing that tailored financial products significantly enhance operational efficiency and growth. Findings indicated that micro savings improve financial stability, while flexible repayment options for micro credit support sustainable business practices. Additionally, awareness and customized solutions for micro insurance products were found to bolster risk management among SMEs. Digital banking was highlighted as a critical enabler of faster transactions and better cash flow management. The conclusions suggest that targeted financial services and educational initiatives are vital for empowering SMEs to optimize their performance. Recommendations include developing customized financial products, enhancing digital banking infrastructure, and providing financial literacy training to improve overall business resilience and sustainability.