Challenges Affecting Financial Performance of Small and Medium Sized Firms in Kenya

Abstract: Financial performance, in a broader sense, refers to the extent to which a firm's financial objectives have been met. This study aimed to evaluate the obstacles impacting small and medium-sized firms' financial performance in Kenya. The study's foundation was the body of existing literature, particularly on the variables affecting performance in small and medium-sized businesses, which was used to pinpoint these difficulties. The study's descriptive survey design was used. Nine hundred and eighteen businesses answered questionnaires from the researcher. To gather primary data for this study, standardized questionnaires were used. The collected data were subjected to correlation analysis, with the findings presented using scatter diagrams. The study established a positive linear relationship between the financial performance of SMEs and each of the variables: capital adequacy, human resources commitment, and customer loyalty