Record Keeping and Growth of Micro and Small Enterprises: An Empirical Study of MSES in Selected Urban Centres in Kenya
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Date
2014
Authors
Muchira, B. W.
Jagongo, A. O.
Journal Title
Journal ISSN
Volume Title
Publisher
Global Institute of Research & Education
Abstract
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). Studies also confirmed that
poor or lack of proper recordkeeping in small enterprises lead to their collapse (Germaain 2010). This study therefore
sought to investigate the extent to which the owners or managers of Micro and Small Enterprises kept records in their
businesses. Descriptive reach design was used to achieve the following specific objectives: To establish the types of
records the MSEs keep; the challenges they face in recordkeeping and the extent to which recordkeeping support
operations and growth of the MSEs. The target population of the study was the owners or managers of MSEs in Thika
municipality in Kenya. The study used multi stage sampling including purposive sampling of MSEs which had been in
operations for a minimum of 5years, along the main streets in the Central Business District, and random sampling of 10%
of the 862 MSEs. Questionnaires were used to collect both qualitative and quantitative data through personal interviews
of the respondents while document analysis was used to gather quantitative data. The all the collected data was analyzed
using descriptive statistics with the aid of SPSS. The study found out that the MSEs kept sketchy incomplete records,
largely unprofessionally done, with non-conceivable contents and patterns. The accounting record was poorly done
because of lack of accounting knowledge and for the fear of the cost of hiring professional accountants. It was also
revealed that there was inefficient use of accounting information to support financial performance measurement by
MSEs. This made it difficult for the entrepreneurs to make informed financial and economic decisions for their
businesses. The study however established that the owners and managers of MSEs were highly willing to learn more
about book keeping and accounting but the forums for such trainings were lacking.
Description
Research Article
Keywords
Book-keeping, Accounting, MSEs, Business growth, Entrepreneurs
Citation
G.J.C.M.P.,Vol.3(6):79-87