Influence of Microfinance Services on Financial Sustainability of Tea Farmers

Abstract

The purpose of this study was to investigate the influence of microfinances on Financial Sustainability of tea farmers in Kenya; a case of Greenland Fedha microfinance in Embu East sub county. The study was guided by the following objectives; to determine how savings mobilization, influence Financial Sustainability of tea farmers in Embu East Sub County; to establish the influence of farmer’s financial education on Financial Sustainability of tea farmers in Embu East Sub County; to assess the influence provision of loans on Financial Sustainability of tea farmers in Embu East Sub county and to examine how adoption of Mobile Banking services influence Financial Sustainability of tea farmers in in Embu East sub county. The study utilized a descriptive- survey research design and the target population were 1405 respondents, where 1400 respondents were small scale farmers and 5 employees. Since the targeted population of small-scale farmers was large the researcher used 10% of the total population of small scale farmers to get a sample size of 140 small scale farmers hence a total sample size of 145 respondents as the sample. Primary data was collected through the use of a questionnaire. Data was then cleaned, tabulated and analyzed with the aid of Statistical Package for Social Sciences (SPSS 21.0). The collected data was analyzed quantitatively using descriptive techniques of mean and standard deviation and presented in tables and cross tabulation form. Qualitative data was chronologically arranged with respect to the questionnaire outline to ensure that the correct code was entered for the correct variable. The data was presented using tables. The study found out that is a positive relationship between Savings Mobilization; Farmers Financial Education; Provision of loans; adoption of mobile banking and Financial Sustainability of tea farmers in Kenya. It was then concluded that; Savings Mobilization; Farmers Financial Education; Provision of loans; adoption of mobile banking and Financial Sustainability was a good facet to realizing financial sustainability of the tea sector especially the targeted small scale farmers. Based on the findings of the study, the following recommendations were made; There should be concerted efforts by the management of MFIs in place to put in adequate measures through training and recruitment to enhance the competence and performance of its employees at the human and conceptual level of organization, as the best policies will be harnessed through a high competency and great intellectual ability. Microfinance Institutions of top management should embrace a culture of self-sustenance through exploring on ways to generate their own income and extending the same to farmers through the concept of saving mobilization. High levels of accountability should be put in place by the MFIs and the government in place to ensure the budgetary allocation of credit facilities to farmers is concomitant with income available and priorities should be given in terms of the needs on the ground at the local level. Research on how to get collaboration and joint ventures for funding and mobilization of resources should be should be done between the microfinance institutions and farmers aimed at curbing financial constraints witnessed through fully utilizing the mobile banking platforms available.