Financial Access and Taxation on Performance of Women-Owned Enterprises in the Manufacturing Sector

Abstract

There has been a low involvement of women in the manufacturing sector over a period of time as compared to the male counterparts in Kenya. According to the 2020 Kenya Association of Manufacturers’ Report, only 17 percent of women are engaged in manufacturing. The low participation and poor performance of women owned enterprises emanates from the challenges that women face when engaging in manufacturing activities; majorly financial access and taxation. The objective of the paper is therefore to explore the effects of financial accessibility and taxation on the performance of women owned enterprises in the manufacturing sector, and the way forward for women economic empowerment. Data was collected by administering a questionnaire to women entrepreneurs identified through purposive sampling. The study findings show that women obtain initial source of capital from spouses, friends, Chamas, Savings and Credit Cooperative Organizations, and banks. In cases of shortage, 63 percent of respondents preferred borrowing funds from Chamas, and Savings and Credit Cooperative Organizations. Moreover, 84 percent of the respondents highlighted that high taxation affect the performance of their businesses. They advocate for specific changes on taxation policies: all tax rates should be less than 30 percent, low tax rates for startup businesses, reduction of Value Added Tax, and change of taxation act in favor of women-owned businesses. Limited financial sources is experienced despite the initiatives of the government in disbursing funds to promote the engagement of women in manufacturing. The government need to offer avenues such as direct channeling of funds to business owners to ease their capital access. High taxation can be curbed through introduction of different tax thresholds based on business size, and giving tax holidays to new enterprises.