| dc.description.abstract | The main objective of the research sought to establish the effect of microfinance loans on the asset growth of clients’ enterprises through group lending for the case of Kenya Agency for the Development of Enterprise and Technology (KADET Ltd)-microfinance arm of World Vision Kenya. Specifically the research was to find and analyze the effect of microfinance loans on asset growth. Existing studies have focused little on the effect of micro loans on clients enterprises’ asset growth hence the findings of this report will add to the body of the existing knowledge .The research was a case study of Kenya Agency for the Development of Enterprise and Technology limited and used a casual research design to come up with findings and conclusions. The population of the research consisted of 15,614 enterprises from which a sample of 80 approved loans was randomly selected across ten out of thirteen branches of KADET Ltd. The research utilized secondary data from KADET Ltd database for the analysis. The study used a regression model to analyze asset growth between years 2010 and 2013 in reference to loans acquired within the same period, where 2010 acted as the base year. Coefficient of determination was used to determine how much of the variations in assets were explained by changes in microfinance loans acquired by the clients. The findings indicated that microfinance loans explained a small percentage of the asset growth of the clients’ enterprises. Further, F test was used to interpret the significance level of the microfinance loans to enterprise asset growth. The findings indicated that the microfinance loans had an effect on the clients’ enterprise asset growth; however, the effect depicted a significant negative relationship between microfinance loans and the enterprise’s asset growth-this meant that as the loans grew the assets diminished. From the research findings, it was concluded that KADET Ltd microfinance loans do not contribute to asset growth of their clients’ businesses. If the main purpose of lending to clients for Kadet is to grow their business assets, then the study recommended a revision of purpose since it doesn’t meet the objective. This was because the Microfinance loans were found to have a significant negative effect on the growth of clients’ assets. This being a case study, the findings may not be inferred to the entire industry of microfinance as a result it was recommended that a similar study to be undertaken using a bigger population of companies in the industry. Further it should incorporate other variables like skill on business management and capacity building and training, for comprehensive results. | en |
