| dc.description.abstract | Access to procurement financing remains one of the most pressing challenges
hindering the growth of Small and Medium Enterprises (SMEs) in Kenya. Despite
deliberate policy interventions aimed at increasing SME participation in public
procurement, many businesses continue to face constrained working capital and
delayed payments, which limit their ability to scale and fulfil contracts effectively.
This study assessed the effect of public procurement financing on the growth of
SMEs. Specific objectives were to examine the effect of LPO financing on the
growth of SMEs, to determine the influence of advance payments on the growth of
SMEs, to assess the effect of payment within 30 days on the growth of SMEs and to
evaluate the influence of the Youth Enterprise Access Fund on the growth of SMEs.
The research was anchored in the Resource-Based View (RBV) Theory, which
underscores the strategic importance of internal and external resources, particularly
financial capital, in enhancing organisational performance and competitiveness. A
descriptive research design was employed, targeting SME owners from a population
of 35,700 registered SMEs. Using the formula by Yamane, a sample of 395 was
selected. Data were gathered through questionnaires and analysed using multiple
regression to examine the relationship between procurement financing and SME
growth. The findings revealed that financing mechanisms collectively play a
significant role in explaining SME growth, with nearly 79% of growth variation
accounted for by LPO financing, advance payments, payment within 30 days, and
the Youth Enterprise Access Fund. The study recommends that the government
implement structured financing mechanisms, including credit guarantee schemes,
invoice discounting, and automated supplier payment tracking systems. Policy-
makers, particularly the National Treasury and the Public Procurement Regulatory
Authority (PPRA), there is a need to integrate procurement financing mechanisms
into wider SME development and financing policies. Harmonisation will reduce
fragmentation, ensure consistency across government initiatives, and promote
sustainable growth of SMEs in the long term. | en_US |
