FINANCING STRATEGIES AND LIQUIDITY OF SUPERMARKETS IN KIAMBU COUNTY, KENYA
Abstract
This study's objective was to assess how financing options impact supermarket liquidity in Kenya's Kiambu County. The study specifically Investigated the impact of official finance, informal financing, financing decision and government money on supermarket liquidity was one of the particular goals. The study design employed was a descriptive survey. 76 participants from 38 stores in Kenya's Nairobi Kenya made up the target demographic. A census study methodology was used. The study took the five-year span between 2017 and 2021 into account. Primary data sources that were gathered using semi-structured surveys were used in the study. The data were presented using tables. The research showed that financial institutions, microfinance organizations, and co - operative societies for savings and credit provided the majority of the funding. The results presented that majority of the supermarkets embraced informal credit financing as one of the major source of finance in the retail sector which included; interpersonal borrowing from peers, table banking and leases. The findings presented that the supermarkets pooled funds, ploughed back profits and used personal income to finance the operations of the supermarkets. The results presented that the supermarkets have not benefited from government credit guarantees, recovery loan plans, youth entrepreneur development fund and no funding from the government. The mean aggregate score for current ratio, quick ratio and cash ratio indicated that the targeted supermarkets were not doing well in terms of liquidity and that the supermarkets were unable to meet quick maturing responsibilities such as paying workers, rent, water bills, electricity and rates.The study concluded that formal financing, informal financing, internal financing had a positive and significant effect on supermarket liquidity. The relationship between government financing and liquidity of supermarkets was insignificant. Supermarkets should employ informal credit financing for financing, which offers many benefits, including easy access to information through social and private networks. For the supermarkets without access to commercial credit, informal moneylenders should serve as an extremely important source of short-term and emergency financing.
Key Words: Official Finance, Informal Financing, Financing Decision, Government Money
CITATION: Rotich, A. C., & Mungai, J. N. (2022). Financing strategies and liquidity of supermarkets in Kiambu County, Kenya. The Strategic Journal of Business & Change Management, 9 (4), 1283 – 1298.
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DOI: http://dx.doi.org/10.61426/sjbcm.v9i4.2495
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