Abstract: Since the first institution was granted a license by the Central Bank of Kenya in 2009, the majority of microfinance institutions in Kenya have experienced losses. For example, the total loss before tax for the microfinance institutions indicated a general drop in performance. Reduction in financial income was a major factor in the profitability sector's collapse. The industry recorded a lower return on equity ratio and return on assets due to a fall in performance. Therefore, this study sought to investigate the effect of accounts payables on financial performance of Micro Finance Institutions in Kenya. A descriptive research design was adopted in the study. The 13 microfinance institutions in Kenya as of December 31, 2019, as listed on the Central Bank of Kenya website, comprised the study's population. We conducted a census with thirteen MFIs. Using secondary data collection sheets, the study examined data from published financial statements and annual reports covering the previous five years, from 2018 to 2022. The financial performance of Micro Institution was assessed using Return on Assets (ROA). A descriptive statistical analysis, utilizing the mean and standard deviation, was performed on the quantitative data received from the study. In order to determine how much each variable influences the others, the study also used inferential statistics, specifically correlation and multiple regression analysis. Tables were used to display the data. The study discovered a relationship between Kenyan Microfinance Institutions' financial success and their management of accounts payable. According to the study's findings, MFIs prioritized highlighting the benefits that a product or service can offer the consumer, which resulted in a more consultative sales approach. According to the study, MFIs should process map their accounts payable to enable prompt identification of any inefficiencies or bottlenecks.
Keywords: Accounts Payables Management, Financial Performance.
Title: EFFECT OF ACCOUNTS PAYABLES MANAGEMENT ON FINANCIAL PERFORMANCE OF MICRO FINANCE INSTITUTIONS IN KENYA
Author: Mwangi Paul Mburu, Dr. Fredrick Warui
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
Vol. 11, Issue 4, October 2023 - December 2023
Page No: 341-347
Research Publish Journals
Website: www.researchpublish.com
Published Date: 14-November-2023
