An Assessment of Financial Literacy and the Performance of UWEZO Funded SME’s in Kirinyaga County, Kenya

The study sought to assess the financial literacy and performance of Uwezo funded SMEs in Kirinyaga County. Lack of finance has been attributed to be the cause of poor performance of SMEs necessitating the government of Kenya to initiate programs such as UWEZO fund to provide the much needed finances for the success of these SMEs. Among the Kenya government initiatives is the financial literacy training program that is provided to the UWEZO fund beneficiaries as a prerequisite for getting the funds. Guided by financial literacy theory the study surveyed the level of financial literacy among 88 uwezo funded SMEs who were randomly selected and assessed the effect of the financial literacy on the performance of the SMEs. The findings of the study reveal that there is a significant positive relationship between financial literacy and the performance of the sampled SMEs. It was established that the SME owners had good financial literacy skills in terms of personal savings, record keeping, credit management and budgeting but had difficulties in implementing these skills in their day to today business decisions. The study therefore recommends that the providers of the financial literacy training programs should have a review program to ensure that the SMEs are able to apply the skills acquired to be able to make better business decisions. The study also recommends that a similar study can be conducted on the same SMEs to identify the cause of the knowledge gap. Key words: Financial literacy, personal savings, record keeping, credit managemen

The Moderating Effect of the Listing Sector on the Relationship Between Capital Structure and Financial Distress of Non-Financial Companies Listed in Kenya

This paper sought to investigate the moderating effect of the listing sector on the relationship between capital structure and financial distress of listed non-financial firms in Kenya. In total, non-financial firms are listed across seven sectors depending on their primary commercial activity. Capital structure was operationalized by total debt, long-term debt and short term debt financing. The degree of financial distress was measured using the Altman’s Z-score index as reviewed for the emerging markets. Secondary data from audited and published financial statements was collected for the 40 listed non-financial firms for 10 years between 2007 and 2016. The study estimated the specified panel regression model for fixed effects as supported by the Hausman test results. Feasible Generalized Least Squares (FGLS) regression results revealed that the listing sector has a significant moderating effect on the relationship between capital structure and financial distress of non-financial firms. On the basis of these empirical findings, the study recommended that managers of listed non-financial companies should always consider the sector-specific factors in making leverage choice decisions for their entities. Keywords: Capital Structure, Financial Distress, Listing secto