Effect of Women Entrepreneur Characteristics on Small and Medium Enterprise Financing Options
##article.abstract##
Small and Medium Enterprises (SMEs) use different sources of financing; some of them emerge to be a challenge to the performance of the SME. Most SME owners lack the necessary knowledge on which the sources of finance. Businesses need finances for their expansion, production, innovation, growth and development. For SMEs to survive and grow, access to debt finance is critical. Owners’ characteristics are an important determinant of finance option among SMEs. The aim of this paper was to determine the effect of women entrepreneurial characteristics on the SME financing options and its effect on SME performance. The study was informed by Human Capital Theory and Leader Motive Profile Theory. Explanatory design was adopted. The study targeted 295 SMEs registered as companies within Nairobi CBD. A systematic sampling technique was used to select 170 respondents. Secondary data was collected from financial records of SMEs and structured questionnaires were used to collect primary data. Descriptive statistics such as mean and standard deviation and inferential statistics such as Pearson correlation and multiple regression model were used in analyzing data. The study findings indicated that women entrepreneurs’ managerial competence and self efficacy have a positive effect on SME financing option. However, women entrepreneurs’ overconfidence has a negative effect on SME financing option. Thus, entrepreneur characteristics are important determinants of financing SMEs. It is therefore paramount to train them in managerial competencies and how they should posses self efficacy traits. Moreover, women entrepreneurs need to be sensitized on the negative effect of being overconfident when choosing options for financing their business.
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