A

R
S OF GO D A N D HU

ST. PAUL’S UNIVERSITY

UNIT: BFI 305: FINANCING SMALL BUSINESS
SEMESTER: JANUARY –APRIL 2020 SEMESTER
LECTURER: James Mwangi
EMAIL: jnjau@spu.ac.ke
Phone: 0721562473
COURSE OUTLINE
Course Purpose:
To study the fundamentals of financial intermediaries and markets. Special emphasis is placed on the role of
financial intermediaries in modern market societies and small business.
Course Objectives:

1. Definition of basic concepts

2. Describe the nature and scope of small business
3. Explain the purpose and meaning of financial intermediation
4. Describe the Kenya financial market structure and explain the role of the financial system
5. Explain the management of assets and risk in financial institutions
6. Discuss the role of money and capital market in developing countries
7. Describe the finance options available for small business

SPECIFIC TOPICS
WEEK TOPIC / SUB- TOPIC

Week 1 Introduction
- The concepts of small business
- Classification of small business
- Characteristics of small business
- The concept of finance
Week 2 - Entrepreneurial process
- The Stages Business development
Week 3 The purpose and meaning of financial intermediation

-         The meaning of financial intermediation

-          Functions of financial intermediaries

-         Reasons for the dominance of finance intermediaries over direct

financing
Week 4 The Kenya’s Finance Market
- The structure of a finance system
- The functions of a finance system
- The participants in a financial system
 - Instrument used in a financial system

Week 5 Continuous Assessment Tests

Week 6 The structure of the Kenya financial system

Components and functions of the Various financial institutions

- Regulatory agents: Treasury, The Central Bank, capital market

authority, Insurance regulatory Authority
- Financial institutions: Nairobi stock exchange, commercial banks,
non-banks institutions, insurance companies, Pension funds,
development banks, regional finance institutions.
- Effect of regulation on small business finance

Week 7 The money Market

- The purpose of the money market
- Money market segments and participants
- Money market instruments

- Role of money markets in small business finance

Week 8 The Capital market

- Define capital market

- Functions of the capital market
- Instruments of the capital market
- Actors in the Kenya capital market
The Nairobi stock exchange
- Role of capital market in small business finance
Week 9 Continuous Assessment Tests

Week 10 The Nairobi stock exchange

- Functions of the stock exchange
- Main actors in the stock exchange
- Types of investors
- Securities in the stock exchange
- Primary and secondary public market
- Listing of SMEs in the growth market segments
Week 11 Finance options available for small business
- Introduction
- And Sources of short-term finance
- Sources of medium-term finance

- Sources of long-term finance

Week 12 Revision
Week 13 EXAMS

Course assessment:

Continuous assessment tests (CATS)                          30

Final examination                                                 70

Total                                                                 100

Key References:
1) Histrich R.D Peters M.P and Shepherd D.A (2008)
Entrepreurship (7thed).McGraw Hill: New York
2) Khanka, S.S (2007) Entrepreneurial development. Ram Nagar,new Delhi:
S.Chand&co
3) Venture Capital Investing: The Complete Handbook for Investing in Small Private
Businesses for Outstanding Profitsby David Gladstone and Laura Gladstone
4) Kibera, F.N(Ed).(1996)Introduction to business: A Kenyan perspective
Nairobi: Kenya literature Bureau.
5) Republic of Kenya (2005).Sessional paper no 2 of 2005 on development of micro and
Small Enterprises in Kenya for wealth creation, employment generation and poverty
Reduction.Nairobi.Government Printer
6) SASRA Act
7) RBA Act
8) IRA Act