Access to Credit and Training on Performance of Small and Medium Enterprises in Kenya: Evidence from Taita Taveta County

Abstract

Small and Medium Enterprises (SMEs) play a vital role in Kenya’s economic growth, contributing significantly to employment creation and income generation. Despite this importance, the performance and sustainability of SMEs in many counties, including Taita Taveta, remain constrained by limited access to credit, inadequate business training, and weak internal business structures. This study examined the influence of county business training programs, access to credit, and business characteristics on the performance of SMEs in Taita Taveta County. The study adopted a descriptive research design and targeted 4,042 registered SMEs, from which 364 respondents were selected using stratified random sampling. Data were collected using structured questionnaires and analyzed using both descriptive and inferential statistics, including correlation analysis. The findings revealed that county business training programs have a significant positive effect on SME performance by enhancing managerial competence, financial management practices, and customer handling skills. Access to credit also demonstrated a strong and significant influence on SME growth, enabling enterprises to restock, expand operations, and improve sales output. Additionally, business characteristics such as size, age, and structure were found to moderate the relationship between training, credit access, and performance, with more established SMEs benefiting more from available support mechanisms. The regression model showed that the three variables jointly explained 87.7Percent of the variation in SME performance, indicating a strong predictive capacity. The study concluded that improving access to affordable credit, strengthening county training programs, and enhancing SME internal structures are critical for boosting performance. The findings provide valuable insights for both county and national governments in designing integrated SME support frameworks and contribute to the broader literature on enterprise development in Kenya. Several recommendations are proposed. First, there is a need to strengthen county training programs. Second, improving access to affordable credit by developing flexible and SME-friendly loan products. Third, the county should promote enterprise formalization and capacity building by supporting business registration drives. Additionally, the county government should strengthen monitoring and evaluation systems to track the effectiveness of training and credit. Finally, the study recommends the adoption of integrated SME support models that combine financial access, training, mentorship, and strategic advisory services.