Financial Strategies and Growth of Small and Medium Enterprises in Kerugoya Town, Kirinyaga County, Kenya

Abstract

Small and Micro Enterprises (SMEs) in non-industrial nations and Kenya specifically face various difficulties in their way to development and extension. Despite the numerous new companies and government exertion to improve the administrative and institutional structure in Kenya, most SMEs do not advance into medium enterprises. So, this survey intended to determine the influence of financial strategies on growth of SMEs in Kerugoya Town, Kirinyaga County, Kenya. The objectives of the survey were; to determine the effect of investment practices, accounting information systems, financial reporting and funding on the growth of SMEs in in Kerugoya Town, Kirinyaga County, Kenya. This survey was guided by Mental Budget Theory, Grameen model and Hierarchical Order Theory. The research used a causal research design and mainly show the current state of affairs. The study targeted 150 SMEs operating in Kerugoya town, Kirinyaga County and registered with the Kirinyaga County Government in 2019. Stratified random sampling was utilized to choose 109 SMEs. Questionnaires were utilized to obtain data. To ensure reliability and validity, this questionnaire was piloted to seven participants who were not within the area of the research. Determine the reliability of the study; Cronbach's alpha was calculated and an alpha more than 0.7 was obtained, which demonstrated that the tool is reliable. The gathered data were analyzed by the aid of 23rd edition of the Social Science Statistical Package (SPSS). The data analyzed were displayed through frequency tables, pie charts, and bar charts. The survey findings show that investment practices, financial reporting, accounting information systems and funding significance impacted the growth of SMEs in Kerugoya Town since the P-value is less than 0.05. The survey recommended that finance organizations ought to take on more forceful administrative preparing techniques that have sectorial way to deal with prod development. These methodologies could remember esteem chain expansion for item and administration lines and plan more market entrance systems.