Abstract:
Agriculture is the mainstay of Kenyan Economy. One of the key players in the Sector is Agribusiness small and micro
enterprises (SMEs). These SMEs play a critical role in provision of employment in emerging economies like Kenya. Access to finance is
critical to growth as well as development of small and micro enterprises (SMEs). Most of the SMEs rely on commercial banks for
financing of their enterprises. Inadequate access to finance could limit growth as well as development of these institutions. This study
aimed at investigating the effect of credit processing period on financial performance of agribusiness small and micro enterprises in
Nyeri Central Sub County. The study adopted credit rationing theory. The target population of this study was 950 licensed Agribusiness
SMEs in Nyeri Central. A sample size of 274 licensed SMEs operating in the Nyeri Central Sub County was chosen by the use of the
Krejcie and Morgan's criterion. A pilot study was done and a Cronbach alpha coefficient of 0.7 was used to evaluate the reliability of the
semi-structured questionnaires. A response rate of 86.5% was achieved.. Regression assumptions of linearity, independence and
normality were done. Results were interpreted using 5% level of significance. Bivariate Linear regression analysis results indicated that
there was a negative and statistically significant linear relationship between credit processing period and financial performance of
Agribusiness SMEs..The study recommends that the period it takes to process credit should be reduced in order to enhance performance
of Agribusiness SMEs. In addition, Agribusiness SMEs should maintain all relevant financial records and books of accounts required
and prepare final accounts to fast track credit processing. The overall effect of this might be enhanced financial performance.