Enhancing Small and Medium Enterprises Credit Access and Performance through Technological Integration.

Abstract

Small and Medium Enterprises in Kenya face innumerable challenges that affect their financial performance. Lack of financiers, market information gaps, and poor financial management practices are some of the factors that are likely to affect performance of Small and Medium Enterprises. These challenges can be solved through technological integration of the key market participants especially financiers and suppliers. The purpose of this study was to establish a technological mechanism to bring together SMEs, financiers, suppliers in a single technological platform with a view of improving business access to finance and profitability. A desktop research was applied whereby online papers on the theme of technological integration of market participants and SMEs financing and performance were analyzed. Results showed that technological integration of SMEs and Key market players (Creditors and suppliers) would enable the SMEs to access credit easily, provide perfect information on prices of commodities, promote fair competition, increase profits and minimize opportunity costs. Besides, it would help creditors to assess credit worthiness of SMEs by reviewing their transactions, reduce credit default risk and help creditors and suppliers to access a larger market. We recommend development of an application and an online system tailored to the needs of SMEs, creditors and suppliers in order to harness full benefits of technological integration.