Small and medium scale manufacturing enterprises in Kenya:a perspective on alternative sources of financing
type: CreativeWork
description: Small and medium-scale enterprises (SMEs) form the majority of the enterprises in the Kenyan economy. They employ a large share of the labour force. The sector is perceived as an alternative employer. Recent studies show that SMEs are at least as important as large firms in the creation of gross and net new jobs. Notwithstanding their importance, most SMEs are unable to exploit the increased market opportunities due to a number of constraints. This is because of either low productivity, incapacity to face competition from imports or in export markets, constraints to adapt new technologies and or a lack of finance. Financing of the sectors' activities is always cited as one of the problems facing the sector. The literature review on SME's access to bank finance indicates that most SME operators have limited access to bank finance. SME access to the formal financial sector is constrained by high risks and transaction costs associated with commercial lending. To develop them and maintain their contribution, initiatives are required to enable them grow and flourish. The aim of this study was to provide a perspective on use of alternative finance by SMEs in Kenya. The study focused on three manufacturing sub-sectors, namely: Textile and Garment, Furniture and Wood products and Metal and Metal products. To achieve this aim, the study sought to identify factors influencing the financing structure of SMEs such as enterprise demographic factors, investigate alternative methods or models of SME financing; identify factors which limit SMEs access to credit from the formal financial market, main sources of SMEs finance, and suggest and recommend measures to improve SMEs finance in Kenya. The study employed survey research design methodology in which combinations of research methods were used. These included questionnaire survey, observation; face to-face interviews and literature review. Various enterprise finance theories making up the meta-theoretical framework used in the st…
abstract: Small and medium-scale enterprises (SMEs) form the majority of the enterprises in the Kenyan economy. They employ a large share of the labour force. The sector is perceived as an alternative employer. Recent studies show that SMEs are at least as important as large firms in the creation of gross and net new jobs. Notwithstanding their importance, most SMEs are unable to exploit the increased market opportunities due to a number of constraints. This is because of either low productivity, incapacity to face competition from imports or in export markets, constraints to adapt new technologies and or a lack of finance. Financing of the sectors' activities is always cited as one of the problems facing the sector. The literature review on SME's access to bank finance indicates that most SME operators have limited access to bank finance. SME access to the formal financial sector is constrained by high risks and transaction costs associated with commercial lending. To develop them and maintain their contribution, initiatives are required to enable them grow and flourish. The aim of this study was to provide a perspective on use of alternative finance by SMEs in Kenya. The study focused on three manufacturing sub-sectors, namely: Textile and Garment, Furniture and Wood products and Metal and Metal products. To achieve this aim, the study sought to identify factors influencing the financing structure of SMEs such as enterprise demographic factors, investigate alternative methods or models of SME financing; identify factors which limit SMEs access to credit from the formal financial market, main sources of SMEs finance, and suggest and recommend measures to improve SMEs finance in Kenya. The study employed survey research design methodology in which combinations of research methods were used. These included questionnaire survey, observation; face to-face interviews and literature review. Various enterprise finance theories making up the meta-theoretical framework used in the st…
author: Migiro, Stephen, Oseko
keywords: Accounting
license: https://uzspace.unizulu.ac.za/bitstreams/673ff3d0-f010-45e2-a019-c530ed4e0abc/download
date published: 2005
date modified: 2026-07-24T06:16:58Z
provider: University of Zululand
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: University of Zululand