Financial Inclusion: Impact of M-shwari on Access to Credit Among Mse’s in Kiambu County

Abstract

MSEs are considered engines of growth, crucial in the stability of most economies. Studies have shown that Micro, Small and Medium Enterprises (MSME‟s) account for 95% of firms in most countries. According to a report by the Kenya National Bureau of Statistics (KNBS), the sector in Kenya had been recognized for its role in the provision of goods and services, fostering competition, enhancing innovation, generating and increasing employment opportunities especially in the informal sector and consequently alleviating poverty. Despite playing such a significant role in most economies, MSEs in numerous developing countries continue to struggle due to lack of capital and inability to access credit. The objective of this study was to assess the impact of M-Shwari on access to credit on MSEs based in Kiambu County. With an estimated population of 26,710 licensed MSEs in Kiambu, the researcher used stratified random sampling then applied simple random sampling to select 30 respondents from each strata which were Githurai, Ruiru, and KM (adjacent to Kenyatta University) areas, making it 90 respondents in total. Questionnaires were used to gather primary data from respondents and of the 90 questionnaires, 84 were filled and successfully returned. The study employed the use of descriptive analysis as well as regression analysis to analyze the data collected. The researcher used the Statistical Package for the Social Sciences, (SPSS), to analyze the quantitative data. The study revealed that there was a positive and a significant correlation between access to M-Shwari and access to credit among MSEs in Kiambu County, the study also depicted a positive relationship between affordability of the product and access to credit; both findings lending credence to the argument that when a financial product is accessible and affordable it impacts financial inclusion positively and significantly. The study thus recommends for policies and innovations that encourage and improve financial inclusion as they have proven to be critical to the development and sustainability of small businesses and startups.