| dc.description.abstract | Micro-finance has been recognized for the active role it can contribute to economic
development and poverty alleviation in the rural areas. There has been a growing focus on
this sector, as the underlying concepts become better understood. Whereas much attention in
the past centered on the provision of the credit component of micro- finance, this tended to
disregard the savings aspect. Rarely would credit provision go alone without being fueled by
savings mobilization as the two serve complementary roles. Save for the legal provisions that
hinder saving mobilization, it is an area that needs to be promoted alongside the credit
component, as they are the two faces of the same coin; you cannot promote one and ignore
the other.
It is for this reason that the study sought to establish as a case study, whether the potential for
a saving led micro-finance initiative exists in Makueni district one of the rural ASAL district
ranked among the ten poorest in the country. This study aimed to identifying the MFls
operating in the district and the services they offer. It also looked at the saving capacity and
demand for credit by the local community in the district.
The study used a two parts structured questionnaire to obtain primary data. Part one was
administered to the management of the sampled MFls while part two pi1f was administered
to a sample of members and non-member who where the comparison group. The study used
convenience sampling. The data obtained was analyzed using the SPSS statistical software,
which gave descriptive statistics such as frequencies, percentages, proportions, maximum,
minimum, mean, mode and median. From these, the various variables being tested where
established and presented in tables and graphs.
Findings of the study indicate a fair presence of MFls in the district with varying degree of
financial products on offer. However the outreach of the formal MFls is far from expectation
although that of the informal community savings and credit associations (CSCAs) is
widespread but with very weak governance and management structures. The level of savings
mobilized (save for the legal restriction on saving deposits) is promising, so is the demand for credit, which is however constrained with the thin financial base of the existing initiatives
both formal and informal.
The study concludes that a wide variety of micro-finance schemes are operational in the
district with the majority being informal and run as hobby clubs to provide safe custodial
facility to members savings while at the same time provide a quick and convenient way to
access affordable credit to meet house hold cash flow deficits. The formal MFls are still
young and prospecting and are yet to achieve their targeted market. Much has not been
achieved in this front due to inadequate marketing campaigns as the MFls lack funds to do so
and competition from the CSCAs, which the community has much confidence in. The
community has a huge capacity to save but largely lacks the mechanism to do so. This is
attributed mainly to lack of management skills to run saving schemes that would guarantee
desired returns. The same can be said of the demand for credit. The potential exists but this
has not been exploited due to lack of know-how.
Recommendations of the study points towards the establishment of saving led micro-finance
initiatives as these are able to offer services that are flexible, appropriate, quick, convenient
and affordable to the local and also enhances a sense of ownership within the community.
The model is also able to take care of regional imbalances with the community such as the
seasonal nature of income form different activities, monetization level of the different zones,
market access, social and organizational strength within the community. | en |
