Effect of Microfinance Institutions’ Products on Growth of Women Owned Enterprises in Kisii County

Abstract

Microfinance institutions have established programs that aim to empower women as well as enhance poverty alleviation. These institutions were established to ensure that they provide financial services to people who were previously not in position to enjoy financial services as a result of increased cost of maintaining and operating banking accounts. The microfinance institutions endeared to offer banking services to such marginalized people who could now access micro credit/loans, saving opportunities and offer training on entrepreneurship as well as proper business habits such as book keeping, insurance and table banking. The study sought to determine the effects of micro finance institutions’ products on growth of women owned enterprises in Kisii County, Kenya. The study sought to determine the effects of micro finance institutions’ products on growth of women owned enterprises in Kisii County, Kenya. The particular items studied included accessibility to MFI, microcredit, training and development services and how they influence growth of women owned enterprises. The study employed descriptive research design. The results were analyzed using statistical package of social sciences (SPSS) software. Model summary results indicated that accessibility to MFI, microcredit, training and development services are satisfactory in explaining growth of women owned enterprises. Accessibility to MFI, microcredit, training and development services explained 61.4% of growth of women owned enterprises in Kisii County, Kenya. The coefficient of accessibility to MFI has a positive and significant effect on growth of women owned enterprises. It was also found that microcredit has a positive and significant effect on growth of women owned enterprises. Training and development services positively affects the growth of women owned enterprises. Access to MFIs allows small enterprises to access credit that may not be available for small enterprises from mainstream financial system. The study thus concludes that accessibility to MFI is essential in the growth of women owned enterprises. The study thus concludes that provision of microcredit significantly impacts growth of women owned enterprises. It was found that training and development services positively affect the growth of women owned enterprises. The study therefore concludes that training and development services provide management experience, functional skills, and relevant business sector knowledge. The study recommends that more MFIs need to be set up in Kisii County to support the rising need for microcredit for women owned enterprises. There is need for micro credit facilities to develop micro credit services specifically tailored to suit the needs of micro small and medium enterprises particularly for the women owned enterprises. The micro credit needs to attract affordable interest rate and favorable repayment terms. The research suggests that kisii county government should cooperate with institutions of finance to create better finance models for enterprises owned by women at rates that are affordable. The research suggests capacity building regularly as well as sensitization on how to adopt and budget micro loans given among the borrowers. Micro and owners of small enterprises should be taught on the success of a given business or project being carried out so as to improve their output.