Influence of Entrepreneurship Training on Financial Performance of Small and Medium Enterprises in Kisii Town, Kenya

Abstract

Small and Medium Scale Enterprises (SMEs) play significant roles in providing employment opportunities, alleviating poverty, empowering communities, provision of goods and services, contributing toward the GDP, and achieving sustainable growth and development of the Kenyan economy. The purpose of this paper is to explore the influence of microfinance services on financial performance of SMEs in Kisii Town, Kenya. This work also aimed to bridge the gap of existing literature review about the influence of microfinance services on financial performance of SMEs in Kisii Town. Specifically this paper aims to establish the influence of entrepreneurship training on financial performance. The study adopted survey research design and was informed by Pecking Order Theory and supported by Credit Rationing Theory. The target population was 575 SMEs. The sample sizes were 240 SMEs. The instruments of data collection were questionnaires and document analysis. Validity of the instruments was enhanced through piloting. Reliability of the instruments was ensured by Crobach alpha coefficient method. Quantitative data was analyzed using descriptive and inferential statistics, and presented by use of tables with frequencies, percentages, means and standard deviations. The findings from the analysis revealed that the respondents generally agreed that microfinance services influenced financial performance of SMEs. The regression-analysis results established that an increase in entrepreneurship training would lead to a 0.095 increase in financial performance.