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1.Most businesses in Kenya lack collateral securities which are necessary to raise other forms of debt finance thus resort to trade credit.
2.it is cheap source of finance because the only cost involved is discounts lost I,e no implicit or explicit costs.
3.most other finances need the borrower to maintain healthy accounts which small businesses in Kenya may not have thus resort to trade credit.
4.The fact that small businesses in Kenya are not known to lenders makes trade credit the best source of finance as they may not qualify for other finances which require that the borrower be known to the lender.
sharon kalunda answered the question on April 16, 2019 at 14:07
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