THE IMPACT OF CREDIT INSTRUMENTS ON NAIROBI INSTRUMENTS: A STUDY OF LINES OF CREDIT, LOANS AND SUPPLIER CREDIT

Abstract

This research investigates the intricate relationship between the utilization of credit instruments and the financial performance of restaurants in Nairobi, Kenya. The dining industry in Nairobi has experienced remarkable growth in recent years, making it an ideal context for examining the impact of credit instruments on financial outcomes. Drawing upon an empirical review and a diverse dataset obtained from a range of restaurant types, this study explores how credit instruments, including credit cards, loans, and supplier credit, influence key financial performance indicators. The findings reveal a significant and positive association between credit instrument utilization and various facets of financial performance within the restaurant sector. Restaurants employing credit instruments exhibit higher rates of revenue growth, improved profit margins, and enhanced liquidity positions. Furthermore, this study identifies variations in credit instrument utilization among different restaurant categories, such as fast food, fine dining, and casual dining establishments. These variations shed light on the nuanced dynamics of credit utilization within the Nairobi restaurant landscape. In light of these findings, this research provides practical recommendations for restaurant owners and managers in Nairobi to enhance their financial performance through responsible credit utilization and risk mitigation strategies. Overall, this study contributes valuable insights to the restaurant industry and financial decision-makers, fostering a deeper understanding of how credit instruments can shape the financial well-being of restaurants in Nairobi