Effect of Client Appraisal on the Profitability of Manufacturing Firms in Kenya

The objective of the study was to determine the effect of client appraisal on the profitability of manufacturing firms in Kenya. The study was anchored on the Credit Scoring Theory. The study adopted the descriptive research design. The Target population for the study was 1,008 registered manufacturing firms in Kenya, whereas the sample size was 286 unit of analysis which were selected via the stratified random sampling technique. The researcher used primary data which was collected using questionnaires. The statistical package for social sciences version 20 was used in analyzing the collected data. The study conducted the test for normality and the test for linearity so as to confirm the fitness and statistical significance of the simple linear regression model used in this study. The regression coefficients generated from the model were used in testing the hypothesis at .05 level of significance. The p-value of .001 for H01 informed the rejection of H01. The rejection of H01, confirmed that client appraisal has a significant effect on the profitability of manufacturing firms in Kenya. The study therefore, concluded that manufacturing firms in Kenya should focus on investing in client appraisal since they significantly affect their performances. The outcomes from the study would be helpful to managers in the manufacturing firms in making informed decisions with reference to client appraisals. The study also enriched the literature in the field of finance. The study recommends that policy formulating bodies and regulatory bodies should devise policies which support formulation and implementation of client appraisal techniques, this is because it has an overall positive effect on the profitability of manufacturing firms in Kenya.