Recycling of waste as a determinant of financial performance of Small and medium enterprises in Eldoret Town, Kenya

Abstract

wing to strong influence on economic and social issues, environmental impact attributed by SMEs activities is significant, not only for their magnitude but also in diversity. However SMEs are often unaware of their environmental impact and lack the resources to implement environmental initiatives and since their environmental footprints are small and localized them easily go unnoticed. Nevertheless the cumulative environmental impacts of countless SMEs constitute major environmental challenges to both regulators and stakeholders, (Kapolon, 2010). Environmental issues is now considered strategic and there has been debate all over the world concerning environmental issues (Waste recycling). Many SMEs are reluctant to adopt waste recycling strategies until they find financial benefit for themselves. The specific objective was to determine the extent to which recycling of wastes determined SMEs financial performance in Eldoret town, Kenya. The study area was Eldoret town, Kenya and the research design adopted was explanatory research design because it compares two variables, the dependent variable being financial performance and independent variable is waste recycling strategy. The research used stratified and simple random sampling and Hotels, restaurants, bars and supermarkets were the study units. There are more than 8175 SMEs in Eldoret town and the researcher used stratified sampling and targeted 80 respondents in supermarkets and 197 respondents in hotels/restaurant/bars. Data collection instruments used was five point likert scale questionnaire and structured interview. Data analysis used was descriptive statistics, explanatory factor analysis, Pearson Moment correlation and regression model analysis. Data was presented using tables, figures and in prose form. The study showed that there is a relationship between waste recycling strategies adopted by SMEs on their financial performance and it found that most SME’s in Eldoret have an understanding of waste management. From simple regression test the study findings; r=0.209 and r2=0.440, which shows that 44% of the growth of financial performance can be explained by the adoption of waste recycling. The study recommends that an awareness programme should be organized in schools, offices, through multimedia houses to educate the masses on the need to recycle waste and thus save on their costs and as a way to generate income.