Title: Effects Of Access To Finance On Investment Of Growth Of Micro And Firms Listed At The Nair0bi Securities Exchange In Kenya
Authors: Sophy Odol Akuku
Volume: 10
Issue: 5
Pages: 88-100
Publication Date: 2026/05/28
Abstract:
Effective financial management is critical for enhancing organizational performance and ensuring sustainable growth, yet many organizations continue to face challenges in cash management, budgeting, and financial reporting, which negatively affect operational efficiency and profitability. This study was motivated by the need to investigate how financial management practices influence organizational performance in selected organizations in Nairobi County, Kenya, particularly addressing gaps in previous research where the combined effect of cash management, budgeting, and financial reporting accuracy on organizational performance was insufficiently explored. The main objective of the study was to examine the effect of financial management practices on organizational performance. The study was guided by Agency Theory and Financial Management Theory, which emphasize accountability, resource allocation, and internal control as mechanisms for improving organizational outcomes. A descriptive correlational research design was adopted, targeting 100 finance staff, including finance managers, accountants, and internal auditors, from which a sample of 80 respondents was selected using stratified random sampling. Primary data were collected using structured questionnaires, and secondary data were obtained from audited financial reports to ensure triangulation. Data analysis was conducted using descriptive statistics, Pearson correlation, and multiple regression analysis. The findings revealed that cash management practices, budgeting practices, and financial reporting accuracy have a positive and significant effect on organizational performance, collectively explaining 65.6% of the variation in performance. The study concludes that effective financial management is essential for achieving organizational success and recommends that organizations strengthen cash management systems, enhance budgeting procedures, and improve financial reporting accuracy to optimize performance.