Abstract:
Small and Medium Enterprises (SMEs) do play a vital role in various economies across the world. SMEs in
Kenya not only have a share in Kenya’s Gross Domestic Product (GDP) but also constitute a larger portion
of Kenya’s employment openings. For longevity of SMEs in Kenya, the financial aspect cannot be ignored.
Technology and human capital cannot be ignored either since it is out of well-trained work force that
Research and Development (R&D) can be conducted in support of innovation related activities and
outcomes which largely support the technological aspect of a firm. The study applies Descriptive research
whereby data collected was analyzed using regression analysis that confirmed econometric least square
model of the study. The study has confirmed a direct relationship between SMEs financial performance and
the independent variables; bank credit, technological costs, GDP, growth in number of SMEs and employee
costs. The study is highly recommended for use by stakeholders in SMEs and Government of Kenya in
efforts to ensure external financing is available to SMEs.
