European Journal of Accounting, Auditing and Finance Research (EJAAFR)

EA Journals

Small and Medium Enterprises

Effect of Cash Conversion Cycle and Inventory Holding Period on the Profitability of Small and Medium Enterprises in Wote, Makueni County (Published)

This study examined influence of working capital management practices on the profitability of small and medium sized enterprises in Makueni County. A cross-sectional survey research design was used. A sample of 50 small and medium sized enterprises from Wote town was used. The financial statements for 2012-2016 were used to generate secondary data while semi-structured questionnaires were used for primary data collection. Descriptive statistics of frequency, means and standard deviation were used while the results were presented in tables. The study aimed at finding out the relationship between profits of the small and medium enterprises and inventory turnover, receivables, cash management and payables. The findings indicated that there exist a positive but not significant relationship between cash conversion cycle and profitability, while inventory-holding period has a positive and significant effect on profitability. The study recommends an improvement on the cash conversion cycle and use of the findings for developing policies for improvement since small and medium enterprises are key contributors to the Gross Domestic Product of the country.

Keywords: Cash conversion cycle, Small and Medium Enterprises, Working Capital Management

Challenges and Obstacles That Small And Medium Enterprises Face In Terms Of Financing in Palestine (Published)

The purpose of the study attempts to analyze the obstacles and challenges that face small and medium enterprises in Palestine. This study seeks to look at the importance of small and medium enterprises, and to identify the most important constraints faced by small entrepreneurs in obtaining the required funding in Palestine, and what are the most important impediments toward financing of small projects. The investigation helped in identifying the major challenges of financing small and medium business and what to do in order to overcome these obstacles. It was also found that small enterprises are one of the most important key elements in achieving economic development in all countries of the world where it accounts for the highest percentage among all kinds of economic projects of all sizes. A qualitative closed-ended survey was carried out for collecting data from managers and owners of 35 businesses in Palestine. The responses of 28 statements were collected in five different categories. The findings showed that the Obstacles facing the growth of small enterprises in Palestine by respondents was “Weakness of representative organizations that defend the interests of small businesses, as well as Lack of legal frameworks and incentives for small businesses

Keywords: Challenges, Financing, Palestine, Small and Medium Enterprises

Microfinance and Business Growth of Women Small and Medium Enterprises’s In Rwanda. (A Case of Selected Women Small and Medium Enterprises in Kicukiro District) (Published)

The purpose of this study was to examine the extent to which Micro Finance contributes to the growth of Women Small and Medium Enterprises (SME) in Rwanda because despite improved access to credit by SMEs overtime, SMEs have continued to suffer financial challenges. The Women SMEs have registered a low return on capital employed, low net profit margin and kept a small capital size and some of them fail to run their daily operations because they do not have the capacity to maintain adequate liquidity levels. As such, the relationship between the MFIs and Women SME keeps on deteriorating due to failure to fulfil their loan obligations. The researcher used descriptive method of study based on qualitative and quantitative approach in order to get better analysis of the study. The population size was 884 out of which 275 were taken as sample size. Both primary and secondary data collection tools with their relevant tools like questionnaire and documentary analysis in order to come up with required data. In the findings it was established that Microfinance institutions provide many different services like loan, advice on investment, savings and training on investment to women SMEs in Kicukiro district. MFI also supports different sectors ranging from Agricultural sector, trading sector, crafts, Agro processing, services like catering, construction, production/ manufacturing, education, Textile and Fabric and many others. It indicates that business performance before micro finance loan was fair which means that the entrepreneurs needed microfinance loan in order to promote business performance. In spite of the challenges of small and medium enterprises face like high interest rate, lack of collateral, the research findings indicate that microfinance improved business performance inform of capital base increase, profitability increase, growth in size and expansion in size. This justifies the role of microfinance in socio economic development especially in the developing world hence women entrepreneurs should embrace microfinance in order to promote their business effectively. The Pearson correlation coefficient reveals that there is a positive high relationship between Micro finance institutions and growth of Women Small and Medium Enterprise (SMEs). This is shown by the value equal to 0.811** tested at 0.01 level of significance. Consequently, it is concluded that Micro finance institutions have a positive impact on growth of selected Women Small and Medium Enterprises in Rwanda.

Keywords: Business Growth, Micro-Finance, Small and Medium Enterprises

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