Evaluating factors that determine financial sustainability at Kenya Association of Manufacturers

Abstract

This study was undertaken with the objective of evaluating the relevant importance of the factors that determine the financial sustainability of Kenya Association of Manufacturers. The study focused on the main factors determining financial sustainability of KAM; good governance, advocacy competence, management competence, availability of financial resources, services to members as well as economic, political and social climate. Business membership organization importance in any economy cannot be underrated since when the needs of their members are effectively addressed; this translates to further and more efficient industrial growth. The accompanying catalytic effects in the rest of the economy through back ward and forward linkages lead to increased general economic growth and development.. It is against this brief background that this study was undertaken to understand and evaluate KAM financial sustainability being a representative of the key drivers to the Kenyan economy. The Kenya Association of Manufacturers executive committee of 16 was used as the population. The committee is representative of members from all the KAM fourteen sectors made up of small, medium and large corporations. 14 executive committee members responded to the questionnaire all of which were completed and analyzed. This accounted for 87.5% response rate The study results showed an increase in the number of business associations / services over the past few years. 75% of the respondent felt that KAM is the most financially sustainable and relevant association. KAM has adequate capacity in advocacy competence, management competence, relatively enough resources, and good governance to financially keep it running. The research indicates that the committee felt members are getting good value against membership fees; however they felt that there was room for improvement from the association especially in the areas of provision of specialized trainings, and consultancy services. The research findings further indicate that the association should diversify its membership base by accepting membership from smaller and medium sized companies who according to the Central Bureau of Statistics constitute 75% of the registered Companies in Kenya. They should also establish and document member's requirement in a more pro active manner. This will boast the subscription income, value add services which would financially sustain the association.