International Journal of Science and Research (IJSR)

International Journal of Science and Research (IJSR)
Since Year 2012 | Open Access | Double Blind Reviewed

ISSN: 2319-7064




Downloads: 106

Research Paper | Management | Kenya | Volume 3 Issue 10, October 2014


The Determinants of Trade Credit in Small and Medium Sized Firms in Kenya

Ruth Wambui Kangethe | Aquilars M. Kalio [4]


Abstract: Access to trade credit is hypothesized to be lower for Kenyan firms than for the developed countries. Despite the potential importance of trade credit, limited attention has been paid to its role and use, especially in developing countries. The main aim of the study was to find out the determinants of trade credit and moderating role age of the small and medium sized firms in Nakuru sub-county. The study was informed by Financial Motives and Commercial Motives models. This study adopted a descriptive survey. The population of study comprised of 6624 registered SMEs in Nakuru town. Simple random sampling was used to select a sample size of 197 SMEs. Documentary guide was used to collect secondary data. Descriptive statistics was used to test for normality of the data collected. Measures of central tendency were computed. Inferential statistics was used to draw implications from the data with regard to the regression model. Correlation analysis was utilized to test the hypothesis of the study. The study findings indicated that profitability, collateral, liquidity and inventory have a positive and significant effect on SME trade credit. The study concluded that SME, s need to establish a well-defined trade credit granting criteria so as to assess the creditworthiness of the buyers. Firms should be cautious while pledging an asset as collateral and should hold liquid assets to enable them meet their financial obligation.


Keywords: Trade Credit, Profitability, Collateral, Liquidity, Inventory


Edition: Volume 3 Issue 10, October 2014,


Pages: 985 - 989


How to Cite this Article?

Ruth Wambui Kangethe, Aquilars M. Kalio, "The Determinants of Trade Credit in Small and Medium Sized Firms in Kenya", International Journal of Science and Research (IJSR), Volume 3 Issue 10, October 2014, pp. 985-989, https://www.ijsr.net/get_abstract.php?paper_id=OCT14321

How to Share this Article?

Enter Your Email Address




Similar Articles with Keyword 'Profitability'

Downloads: 114

Research Paper, Management, Namibia, Volume 9 Issue 5, May 2020

Pages: 892 - 900

Exploring Value Addition in the Pork Market-Share Promotion Scheme in Namibia

Stewart Kaupa PhD [3]

Share this Article

Downloads: 115

Informative Article, Management, India, Volume 4 Issue 1, January 2015

Pages: 2674 - 2695

Securing the Future: A Systems Approach to Continuous Improvement in Health Care by Applying the Theory of Constraints

Tabish S. A. [2] | Nabil Syed [8]

Share this Article


Top