Analysis of Access to the Microfinance Institutions Loans by Female Entrepreneurs and the Impact on Their Business in Nairobi Central Business District

Abstract

This study sought to analyse the relationship between access to finance and business performance.The study also sought to identify the constraints faced by Kenyan women owned small business in accessing credit. A survey approach in this study was adopted. The population of this study comprised of Women owned SMEs based in Nairobi Central Business District. The exact number of female s mall business owners is not exactly known, since some of them are in retail businesses that are not registered. A convenience sample of 300 women randomly selected of which 244 were interviewed. The collection of primary data was done by administering a semi- structured questionnaire. However, respondents were able to give answers to open ended questions. Questionnaires were administered to women owned SMEs using a drop and pick method. Data was analyzed using statistical software SPSS, to produce descriptive statistics such as percentages and frequencies, while the results were presented by using tables and charts. The results show that, the businesses were able to hire more employees and increase turnover Therefore the study established that access to finance impacted on financial performance of SMEs. The study also found that the major constraints that businesswomen encounter in accessing MFIs loans are lengthy process, lack of collateral, lack of education. lack of information, culture barriers, and lack of government support. Other constraints were found to be high interest rates, inadequate business skills, market for their goods, lack of credit and technical constraints.