ABSTRACT
Introduction: Access to finance is a great challenge for most entrepreneurs due to high cost of finance. This has led to closure of some small and medium enterprises due to inability to meet both the short-term and long-term financial obligations. Financial bootstrapping has been advocated for as the best alternative source of finance since it has low cost of finance as compared to other sources of finance. This study sought to determine the effect of financial bootstrapping strategy on sustainability of small and medium enterprises in Kanduyi sub-county.
Methods: A positivism research philosophy was adopted. The study used a descriptive survey research design. The target population and the sample size was 567 and 234 small and medium enterprises respectively.The data was analyzed using statistical package of social studies version 25.0. The study results were presented using both descriptive and inferential statistics.
Results: The results showed that owner financing methods had a significant positive effect on financial sustainability (β = .890, p = 000, α<0.05). Minimization of accounts receivable had a significant positive effect on financial sustainability (β = .776, p = 000, α<0.05). Joint utilization had a significant positive effect on financial sustainability (β = .152, p = 000, α<0.05). Delaying payments had a significant positive effect on financial sustainability (β = .259, p = 000, α<0.05) while minimization of investment in capital stock had also a significant positive effect on financial sustainability (β = .043, p = 000, α<0.05).
Conclusion: The study concludes that entrepreneurs use owner financing methods, minimization of accounts receivable, joint utilization, delay of payments and minimize the capital invested in stock as financial bootstrapping strategies. These strategies have a significant positive effect on financial sustainability of small and medium enterprises.
Recommendations: Entrepreneurs should use owner financing methods, minimization of accounts receivable, joint utilization, delay of payments and minimization of the capital invested in stock as alternative sources of finance so as to reduce the cost of finance.

Key words: Financial Bootstrapping strategies, financial sustainability, small and medium enterprises, Kenya