Determinant Of Financial Performance Of Micro And Small Dairy Sector Enterprises In Kiambu County

Abstract

MSEs are acknowledged as drivers of social economic growth, both in developing and developed economies due to their essential role in rise in GDP, entrepreneurship, creation of new jobs and innovation. However, although micro, MSEs play crucial role in economic development and employment, the MSEs in developing countries face a financial gap. Additionally, despite the potential of MSEs in Kenya to facilitate and foster growth, statistics indicate that most Kenyan MSEs never celebrate their fifth birthday due to myriad financial constraints which affect their financial performance. Further, though MSEs are making positive contributions to Kenyan economic growth, the rate of failure is high. Thus, this research evaluated the determinants of financial performance of micro and small enterprises in in dairy sector within Kiambu County, Kenya. The specific objectives of the study were to examine effect of financing decisions, investment decisions and technology adoption on financial performance of micro and small enterprises in dairy sector located in Kiambu County, Kenya. A descriptive research design was used and the target population consisted of 430 dairy micro as well as small enterprises in Kiambu County. The simple random sampling method was employed in choosing sample size of 129 micro and small enterprises managers. The study used primary data which was collected by use of structured questionnaires. This study used descriptive and inferential statistical tools for analysis of the collected data using SPSS statistical software. Additionally, descriptive statistics such as percentages, frequency, mean and standard deviation were employed to summarize collected data. Inferential statistics included the regression model which was employed1to assess the link between1dependent, and1independent variables and presented in graphs and tables. The study found that financing decisions have positive and significant effect on dairy micro as well as small enterprises in Kiambu County. The study also found that investment decisions have positive and significant effect on dairy micro as well as small enterprises within Kiambu County. The study revealed that technology adoption has a negative significant effect on financial performance1of dairy micro as well as small enterprises in Kiambu1County. Moreover, the1study recommends that dairy farmers ought to seek to expand their small enterprises by increasing the number of dairy cows so as to increase milk production, which would in turn improve profitability of the farms. In addition, dairy farmers should use diversification in their farms by introducing dairy goats, chicken among other livestock.