An investigation into the factors influencing financial sustainability of women owned smes in Kenya: a case of Machakos county

Abstract

The purpose of this study was to identify the various factors influencing women owned SMEs financial sustainability in Machakos County and come up with valuable recommendations on how to ensure financial sustainability prevailed amongst women owned SMEs in Machakos County. The objectives of the study were: to establish the influence of government loans accessibility on women owned SMEs financial sustainability, to establish the influence of financial innovativeness on women owned SME‟s Financial Sustainability, to establish the influence of the capital structure on women owned SMEs Financial Sustainability and to establish the influence of financial management on women owned SME Financial Sustainability. The study was carried out in the eight constituencies of Machakos County namely; Machakos Town, Mavoko, Kathiani, Mwala, Matungulu, Kangundo, Yatta and Masinga. The study used descriptive survey research design. A sample of 383 members was selected from a population of 5311 women owning SMEs businesses using stratified random sampling method. A semi- structured questionnaire was used for data collection. The questionnaire was validated by the supervisor, lecturers and colleagues from the University. Cronbach‟s alpha method was used to affirm the reliability of the instrument. The questionnaire was found to be reliable with a reliability index of 80.5% the collected data was edited coded and analyzed using Statistical package for Social Sciences (SPSS) Version 17.0. The results of the study were presented in tables and percentages. The study established that government loan accessibility, financial innovativeness, capital structure and financial management influence financial sustainability of women owned SMEs in Machakos County. The study concluded that, on government loan accessibility, women entrepreneurs had positive attitude towards government loan policies, procedures and repayment terms. On Financial Innovativeness it was found that entrepreneurship and bookkeeping skills enhanced financial sustainability of women owned SMEs. On Capital structure, it was concluded that debt financing was preferable to equity capital and the cost of borrowing (interest) influenced financial suitability on women owned SMEs. Lastly, on Financial management; financial management skills, management style (management supporting workers with innovative talents) and attendance of entrepreneurship training, business seminar and forums enhanced financial sustainability of women owned SMEs. The researcher‟s recommendation was that, government and its agencies should generally extent its efforts towards women affiliated sectors to promote even and quick economic development.