Debt Financing and Proprietor Experience in Relation to Retail SME Performance

This paper examines whether financing scores from commercial banks, microfinance institutions (MFIs), savings and credit co-operative societies (SACCOs), and government credit programmes were associated with retail small and medium-sized enterprise (SME) performance in Tharaka South, Kenya. It also assessed the additional association of proprietor experience after accounting for the four financing scores. A quantitative cross-sectional survey targeted 269 proprietors from 922 registered businesses in Marimanti and Nkondi wards; 266 usable questionnaires were analysed. The reported joint financing model accounted for 42.2% of the observed variance in the performance score, F(4, 261) = 47.688, p < .001. All four financing coefficients were positive in that model. Adding proprietor experience increased reported R² from .422 to .424, but its coefficient was not statistically significant (B = 0.035, t = 0.843, recomputed p = .400). No financing–experience interaction was identified, so the models do not test moderation. The study compares four named financing channels within one local sample and distinguishes their adjusted associations from the additional main effect of experience. Correlation case counts and score construction require clarification before the statistical findings can be fully verified. The evidence supports bounded associational claims; it does not establish an effect of borrowing on business survival.