Microfinance Credit Access, Utilization And Effects Among Male Entrepreneurs

Abstract

In Kenya, men who are above the age of 35 years may be a disadvantaged sub-group with regard to access to low interest government funds. This is because there lacks a government fund set aside for them, leaving them to only access credit facilities from financial institutions at high interest rates. The study therefore focused on the access, utilization and effects of micro finance credit on the male micro entrepreneurs’ livelihoods. Specifically, the research aimed at establishing how male micro entrepreneurs’ access and utilize credit, what determines the access and nature of utilization of the credit and its social and economic effects on their livelihoods. The study was conducted at Kikuyu Township in Kiambu County. A sample of seventy-six (76) male micro entrepreneurs, selected through a combination of purposive and convenient sampling methods, within the township participated in the study. In addition, four key informants constituting loan officers from the MFIs were purposively sampled. Questionnaires with open and closed ended questions were administered. The data were analyzed through descriptive statistics with the aid of statistical package for social scientists (SPSS). The findings indicated that 95% of the male micro entrepreneurs accessed the microfinance credit for use in their businesses. Factors that determined the access of the credit included the business age, the credit history of the applicant, availability of guarantor and the collateral cover to secure the credit sought. The access was hindered by inadequate collateral cover to qualify for the full amount of credit sought, the application took a long period and the charges involved were relatively high besides the interest charges being very high. Among the male micro entrepreneurs who participated in this study 90% had positively improved their lives and that of their businesses due to the loans and other services granted to them and micro finance had also positively improved the knowledge and management skills of the business owners due to the training programs. Results further indicated that the businesses improved positively in terms of expansion, high sales and increased profits. This was revealed by the increase in number of employees and improved family living standards as well as improved housing and ability to cater for good health care and education. The study concludes that microfinance is one way of improving of livelihoods to the beneficiary only if accessed and utilized well.