Size as a Determinant of Choice of Source of Entrepreneurial Finance for Small and Medium Sized Enterprises in Thika District

Abstract

This article examines influence of firm size as a determinant of choice of source of entrepreneurial finance for small and medium sized enterprises in Thika district of Kenya. The study adopted an empirical descriptive survey study design. The population of interest comprised small and medium enterprises(SMEs) in Thika District, a total of approximately 800 firms. Stratified random sampling was used to select a sample of 259 firms. The survey instrument was a questionnaire administered to the owners or finance managers. Analysis of data was done using descriptive and inferential statistics. The study showed that there was no association of firm size with the source and choice of entrepreneurial finance. The study recommended that SMEs focus on optimizing their size in order to maximize on the potential to increase value in activities and enhance profitability. Adding value would enable SMEs demonstrate their potential for high growth and thus attract potential investors.