Effects of Budget Planning on Financial Performance of Selected SMEs in Eldoret Town, Kenya Moderated by Digital Finance Services

Abstract

The study intention was to investigate effects of budget planning on financial performance of selected SMEs in Eldoret town, Kenya, moderated by digital financial services. Specific objectives of the study were to examine the influence of budget planning on financial performance and effect of digital financial services on financial performance. The study was designed to assess the moderating role of digital financial services on the relationship between budget planning and financial performance of selected SMEs. The research was guided by the Priority-Based Budgeting Theory and Resource Based Theory. The study utilized explanatory research design and descriptive research design. Simple random sampling techniques in collecting data from 302 selected SMEs using structured questionnaires. Cronbach alpha was applied to test reliability while Factor analysis was applied to test validity. Using SPSS version 23 hierarchical regression model was employed in data analysis and testing of the hypotheses. The results reveal that digital finance services had significantly positive relationship between budget planning and financial performance.