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 necessary knowledge on which sources of finance enhances financial performance. One of the essential elements is financing. Businesses need finance for their expansion, production, innovation, growth and development. For SMEs to survive and grow, access to debt finance is critical. Owners‟ characteristic is an important determinant of finance option among SME. 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 which were registered as companies within Nairobi CBD. A systematical sampling technique was used to select a sample size of 170. 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 was used in analyzing data. The study findings indicated that women entrepreneurs‟ managerial competence and women entrepreneurs self efficacy had a positive effect on SME financing option. However, women entrepreneurs‟ overconfidence had a negative effect on SME financing option. Thus, entrepreneur characteristics are important determinants of financing SMEs. It is therefore paramount to train on 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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