Abstract: The vision 2030 framework identifies small and medium enterprises sector as a major engine towards the achievement of middle income status in Kenya due to its role in creation of employment and economic growth. However, the framework is concerned on the high degree of business closure and shrinkage among these ventures. Kenyan small as well as medium sized ventures have a high failure rate with many of them failing within the first three years of operation. Generally, studies show that in Kenya, these ventures continue to have poor performance and face stiff competition from large firms. This dismal performance of small and medium enterprises could be attributed to approaches used by these businesses to counter obstacles which influence the quality of decisions and performance of enterprises given that individual enterprises were responsible for their survival. The purpose of this study was to determine the influence of strategic financial management on the performance of SMEs in Wajir South Sub County, Kenya. The study adopted a descriptive survey research design, targeting all the 1123small and medium enterprises owners in Wajir South Sub County. Primary data was collected using structured questionnaires. Multiple regression equation was used to determine the strength and directions of the relationships between the variables. The study found that strategic financial management positively and significantly affected the performance of small and medium enterprises in Wajir South Sub County. The study concluded that if the performance of the enterprises under study was to improve greatly, the business owners had to address the issues related to strategic financial management so as to improve the level of strategic management in these businesses and in this way, enhance their performance. The study recommends that SMEs in Wajir South Sub County, Kenya should develop strategic plans which outline the strategies to be applied by enterprises in different areas so as to improve their strategic outlook and that the businesses should actively work on building impressive business profiles so as to gain the trust of financial institutions which will enhance their access to financing.
Keywords: Strategic Financial Management, Organizational Performance, SMEs.
Title: STRATEGIC FINANCIAL MANAGEMENT AND PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN KENYA: A CASE OF SMALL AND MEDIUM ENTERPRISES IN WAJIR SOUTH SUB COUNTY
Author: Mohamed A. Yunis, Dr. Janesther Karugu
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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