dc.description.abstract | The study sought to investigate the effect of Microfinance innovations on availing of
finance by Microfinance Institutions to small and medium enterprises in Kenya. There
are various challenges that entrepreneurs face in order to access finances because of their
education background, gender or age, irregular nature of their business and external
factors such as product designs that require minimum account balances to operate. These
challenges inhibit them from accessing financial services such as provision of credit,
savings and current accounts and funding used for working capital and long term capital
for their businesses. MFIs Innovations enable financial products to be available and
accessible at the least cost possible to their clients. Some innovations undertaken by the
MFIs are technology based, product based, strategy based, location based among other
innovations. The project explored product based and location based innovations that are
available to small and medium enterprises and the relationship between the innovations
by the institutions and availing finance by the MFIs to the SMEs. A census survey was
carried out and 6 DTMs out of the 13 licensed by the Central Bank of Kenya were used in
this study. The data was collected from the Central Bank of Kenya Annual bank
supervision reports, Association of Microfinance Institutions annual reports on the
Outlook of the industry and also from annual reports of the individual MFIs under the
study. Data collected included the number of deposits accounts to determine availability
of finance, number of loans products and saving products introduced and number of
branches (location innovation) for a seven year period between 2009 and 2015. The
information collected was analyzed using SPSS to determine the relationship between
availing of finance by the MFI and Microfinance innovations. The research found that
there is a strong positive correlation between innovations and availing of finance and it is
important for MFIs to be innovative so as to increase the number of deposits and in turn
avail finance to small and medium enterprises in Kenya. | en_US |