Improving performance among small and medium Enterprises through managerial training and savings mobilization: Evidence from MSMEs in Kenya

Abstract

Kenyan microfinance has shown resiliency despite local droughts and high inflation rates that afflicted the nation in 2008 and 2009. With the Kenyan government and the Central Bank of Kenya emphasizing financial access as a key to modernizing the economy, the sector has been strengthened by progressive policies and innovative approaches to delivering financial services. Based on a study conducted in Githurai Market, situated in Kiambu County, this paper examines the effects of managerial training and savings mobilization on the performance of micro, small and medium enterprises in Kenya. The study utilized an explanatory research design. The target population was the 429 MSMEs registered by the Kiambu Municipal Council. Of these, a sample of 270 SMEs was selected for the purposes of the study using stratified sampling technique. The study utilized multiple regression analysis set draw inferences on the study using Eviews statistical package. From the study findings,savings mobilization portfolio was also significant at 99% confidence level in determining MSMEs performance in Kiambu County, Kenya (t=3.715, p=0.000). The study also found managerial training to be statistically significant in determining MSMEs’ performance in the County (t values=0.109, p=0.004). It was thus concluded that training in micro enterprise investment as a component of micro finance helps clients in business management and minimizing transaction related risks. The study recommends that microfinance service providers and policy development partners could consider including a micro-insurance scheme in the microfinance package.