Effect of financial perspective on the performance of Small and Medium Enterprises

Abstract

Purpose: There are several ways through which business practices can be established in specific areas, which can lead to outstanding business performance. Using balanced scored model, this study looked into the effect of of financial perspective on the Small and Medium Enterprises (SMEs) performance.

Design/ Methodology/Approach: The study was conducted in Elgeyo Marakwet County in Kenya and sampled 95 SMEs using simple random sampling method. First hand data from sampled SMEs was collected using questionnaires and analysed using Ordinal Least Squares (OLS) regression model.

Findings: The study found out that financial perspective had significant influence on SMEs performance (β = 0.017, p < 0.847).

Contribution to policy and practice: The study confirmed the need for the county government and microfinance institutions to support SMEs financial by offering them cheap, affordable and low interest loan to the resident.

Originality/Value: The study extends and contributes to the strategic management literature on factors affecting performance of SMEs. It is the first study to establish financial and customer perspetive as determinants of SMEs performance in Elgeyo Marakwet County in Kenya.