MEDIATING ROLE OF MANAGEMENT PRACTICES IN THE RELATIONSHIP BETWEEN FINANCIAL MOTIVATION AND POVERTY AMONG MICRO ENTERPRISE OWNERS IN HOMA-BAY SUB-COUNTY, KENYA.

Abstract

The purpose of this study was to investigate the mediating role of Management Practices in the relationship between Financial Motivation and Poverty among Micro Enterprise Owners (MEOs) in Homa-Bay Sub County, Kenya. MEOs in Homa- Bay Sub-County are reported to have a poverty level at 77.49% against the national average of 52%. This poverty level is high and alarming despite the Financial Motivation opportunities available to the Micro Enterprises (MEs). The study adopted survey research design. Population of the study comprised 1200 MEOs in Homa-Bay Sub County in the period 2010-2015. Stratified random sampling was done to get a sample size of 240 MEOs. Questionnaires were used to collect the primary data. The secondary data were obtained from the Homa Bay County Trade and Development Office. Data was analyzed by Confirmatory Factor Analysis and Structural Equation Modeling. Comparison of the models was done using regression weights and Model Fit indices. Findings revealed that Management Practices variable mediates the relationship between Financial Motivation and Poverty among the MEOs. The conclusion was that the mediating effect of Management Practices significantly improves the parsimony of the relationship between Financial Motivation and Poverty among the MEOs. It is recommended that any future studies involving the relationship between Financial Motivation and Poverty should incorporate Management Practices as mediator in that relationship. The study results will be of importance to policy makers, academicians, micro-credit practitioners, donors and MEOs.