THE IMPACT OF PLASTIC PAPER BAGS BAN ON THE FINANCIAL PERFORMANCE OF SMALL AND MICRO-ENTERPRISES IN KILIFI COUNTY, KENYA

Abstract

Small and micro-enterprises play a vital role in sustaining and increasing the world economy through the taxes that they generate for the government, employment they create for the people, the earnings they generate for the owners, and their general contribution to the country’s GDP. In the year 2017, the government of Kenya banned the use of plastic paper bags, which were critical in SME operations. However, it was not known how SMEs coped with the plastic paper bags ban and whether there had been any effects on their financial performance. Therefore, the general objective of the study was to determine the impact of the plastic paper bags ban on the financial performance of SMEs in Kilifi County, Kenya. The study's specific objectives were (i) to determine how SMEs dealt with the plastic paper bag ban; (ii) to determine traders' perceptions of the plastic paper bags ban; and (iii) to evaluate SMEs' financial performance following the plastic paper bag ban. Data was collected using questionnaires and a random sample size of 384 SMEs was used. Spss, Excel, and Xlstat were used to analyze the data. From the study, it was found that SMEs are struggling to cope with the plastic paper bags ban, resulting in lower sales and profits due to negative perceptions, high illiteracy levels, and a lack of skills. In addition, the study discovered that SMEs' sales and profitability have been impacted as a result of the high cost of operations induced by the existing use of alternative packaging. As a result, the study suggested that the government should have considered SMEs before enacting the ban on plastic paper bags. According to the report, the government should help SMEs by providing funds so that they can survive and adapt to such changes. Large-scale enterprises should build and train SMEs on matters of business agility and sustainability as a way of giving back to the community