The Effect of Interest Rate on Credit Access by Smes in the Fisheries Sector Kisumu County, Kenya

Abstract

This study sought to assess the effect of interest rates on credit access in SMEs in the fisheries sector in Kisumu County, Kenya. In order to achieve this, the study adopted the use of mixed research design. The study collected primary data from a sample of 209 SMEs. In addition, the study collected secondary data from a sample of ten Commercial Banks, Ten Micro Finance Banks and ten Microfinance Institutions. The study collected time series data for a period of 22 years between 2000 and 2022. The findings from the multiple linear regression supported the hypothesis about the negative impact of interest rates on credit accessibility among SMEs in the fisheries sectors. Offering higher interest rates has a negative effect of introducing more restrictive measures hence leading to the increased rejection of credit application from SMEs. In addition, the study showed negative relationship between credit accessibility and different levels of interest rates.