Financial Benchmarking of Small and Medium Agro-Processing and Value Addition Agribusiness Enterprises in Kenya

Authors

  • S. Njuguna Ndirangu Agricultural and Biosystems Engineering Department, Jomo Kenyatta University of Agriculture and Technology, P.O. Box 62000-00200, Nairobi, Kenya, Kenya
September 21, 2017

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Financial benchmarking involves financial analysis of an enterprise and comparing the findings to other
enterprises in order to assess the competitiveness, productivity and efficiency of such enterprises. The goal
is to establish the deviations from average norms and identify entry point for improving an enterprise
performance. The study sought to compile some financial ratios that can be used in benchmarking
different categories of small and medium agro-enterprises (SMAEs) and value addition agribusinesses in
Kenya. The ratios documented include; variable input, paid labour, power and machinery, rent and
finance, sundry overheads and net income Twenty enterprises from different sub-sectors were analysed.
The sub-sectors analysed included dairy, fruits and vegetables, cereals, other livestock products, and
edible nuts and oils. The data used was from an earlier findings of appraisal of SMAEs activities by the
Ministry of Agriculture in Kenya. The study also has compiled findings on assessment of the improvement
in performance of some of the thirteen enterprises that were benchmarked using some earlier given ratios
and which were capacity build based on the deviations identified during benchmarking.
The study shows some variations in the ratios across the different sectors and the level of operation. It also
indicates that financial benchmarking can provide an entry point to upscaling the performance of SMAEs.
The data acquired in the study can be used to benchmark both small and medium agro-processing and
value addition agribuiness enterprises.