Understanding Performance of Small and Medium-Sized Enterprises in Nairobi City County, Kenya: The Influence of Financial Accessibility Practices
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2026-03
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Journal of Business Management & Innovation
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In any business or organization’s endeavors, performance is the critical vision for management, growth, and improvement. Besides, in the unpredictable and competitive business environment, the availability of financial resources plays a significant role a sound financial accessibility practice leads to better business opportunities and innovative processes. Small and Medium Enterprises are part of the vast informal economy, which significantly contributes to job creation and poverty alleviation. In Kenya, however, within a few months of operation, about half of these businesses close, while most that remain perform poorly. The dismal performance has been linked to challenges in credit access in the banking sector, as these financial institutions play a key role in serving this segment. The study examined the influence of financial accessibility practices on the performance of small and medium-sized enterprises in Nairobi County, Kenya. Specifically, the study aimed to investigate the impact of entrepreneurial orientation, interest rate, collateral requirements, and credit rationing on access to credit and performance of Small and Medium Enterprises. This research was anchored in three theories: the asymmetric information theory, the adverse selection theory, and the Credit Rationing Theory. A descriptive survey research design was employed in the study to target 3,000 Small and medium enterprises registered in Nairobi County. The sample size was determined using Taro Yamane's formula, selecting 97 respondents as the unit of observation. Proportionate stratified and random sampling was used as the sampling technique. The data collection instrument was a pilot-tested questionnaire for accurate measurement examination. Descriptive statistical methods, such as the mean, standard deviation, frequencies, and percentages, were used to analyze the data. In addition, inferential statistical techniques, such as Pearson's correlation and multiple regression, were used to assess relationships among the variables. The data were presented through tables and charts. The empirical results indicate that the four independent variables had a significant impact on the performance of Small and Medium Enterprises in Nairobi County, Kenya (Adj R2 = 0.743, F-stat = 54.485, p < 0.005). The study concluded that financial accessibility practices improve the affordability, profitability, growth, and cost efficiency of firms' financial services. The study's findings contribute to the body of knowledge, thereby enriching the formulation of policies and best practices for firms to access credit and loans. Management and directors of Small and Medium Enterprises should entrench credit access activities and practices to optimize organizational outcomes.
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Alata , V. ., & Aluoch, M. O. . (2026). Understanding Performance of Small and Medium-Sized Enterprises in Nairobi City County, Kenya: The Influence of Financial Accessibility Practices. JBMI Insight, 3(1), 37-52.