Effect of Savings Generated After Repayment of Women Enterprise Fund Loan On Profitability of the Women-Owned Enterprises in Kajiado County, Kenya

Women-owned enterprises in Kajiado County demonstrate lower profitability compared to neighboring counties despite comparable growth rates in enterprise numbers. This study investigated the effect of savings generated after repayment of Women Enterprise Fund loans on the profitability of women-owned enterprises in Kajiado County, Kenya. Anchored on the Free Cash Flow Theory, the study employed a positivism philosophy and explanatory research design, targeting 8,100 women entrepreneurs who accessed the Women Enterprise Fund between 2018 and 2022. Using Yamane's formula, a sample of 381 respondents was selected through stratified random sampling across five sub-counties, achieving a 72.4% response rate. Data was collected using structured questionnaires and analyzed using Stata version 17, employing descriptive statistics. The findings revealed a strong positive correlation between savings and profitability (r = 0.930, p = 0.000). Regression analysis demonstrated that savings significantly and positively affect profitability (β = 2.255, p = 0.000). The study concludes that savings constitute a critical determinant of enterprise profitability, providing financial resilience and reinvestment capacity. It recommends strengthening savings incentive programs, linking savings behavior to loan eligibility, implementing financial literacy training emphasizing savings management, and establishing accessible savings infrastructure. Further research should explore sector-specific effects and additional profitability determinants in other counties.