Financial Knowledge and Entrepreneurial Success Among the Youth-Led Micro Enterprise in the Informal Enterprises in Homabay Town Sub-County
Abstract
The study examined the influence of financial knowledge on entrepreneurial success among the youth-led enterprises in the informal sector in Homa Bay Town Sub-County, Kenya. The specific objectives of the study were to examine the influence of debit management knowledge, credit management knowledge, budgeting knowledge and maintaining books of account on entrepreneurial success. . The study employed both descriptive and explanatory research design. The researcher included all the 1,050 registered and licensed youth-led micro enterprise in the informal enterprises in the Homabay town sub-county. The researcher used only those youth-led micro enterprises registered between January 2015 and December 2019. The respondents included youth leaders/managers of the micro enterprises. The sample size was 290 respondents. Stratified random sampling technique was used in the study. The data was analyzed using descriptive and inferential statistics. The descriptive statistics was presented in mean, standard deviation and frequencies while the inferential statistics included correlation analysis and regression analysis. The study found that debit management knowledge, credit management knowledge, budget management knowledge and maintaining books of account were satisfactory in explaining entrepreneurial success. The study concluded that debit management knowledge was positively and significantly related to entrepreneurial success (β=.127, p=0.014). Credit management knowledge and entrepreneurial success were also positively and significantly related (β=.189, p=0.003). Further, budget management knowledge was positively and significantly related to entrepreneurial success (β=.641, p=0.000). Finally, maintaining books of account and entrepreneurial success was positively and significantly related (β=.293, p=0.000). The study recommended that youth-led micro enterprise in the informal enterprises in HomaBay Town Sub County should usually perform a regular credit check for the debtors, tighten the credit terms for selective customers, send the invoices electronically to the debtors, use the debt collection agency and also make priorities of debt collection. The study also recommended that youth-led micro enterprises should pay their bills on time, create a monthly bill payment calendar and develop priority in the payment of the debts. The enterprises should also be tracking the incoming and outgoing incomes, set up a saving plan, review and update projections regularly. Further, the enterprises should maintain the cash book to examine the inflow and outflow of the cash, maintain the cash receipt a and also maintain the income statement.
Keywords: Financial Knowledge, Entrepreneurial Success, Youth-Led Enterprises, Informal Sector, Homa Bay Town Sub-County, Kenya
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