| dc.description.abstract | As the world economies struggle to drive economic growth by empowering its citizens
through financial inclusion among other strategies, Kenya has made great strides in
her efforts to reduce poverty and improve the living standards of her majority poor
population. This has been made possible through provision of cheap credit through
microfinance institutions alongside policies that ensure the financial system strives to
include even the traditionally unbanked. The concept of microfinance has changed the
banking sector in Kenya with the major commercial banks also providing micro loans
to the low end market. The result has been a sporadic growth of microfinance
institutions that has increased uptake of microloans by the traditionally unbanked. The
objective of this study was to determine the effect of outreach on the growth of these
microfinance institutions particularly in Nakuru county that have been integral in the
economic growth witnessed in Kenya in recent years. This was informed by the
research problem that despite the concerted efforts by the various stakeholders,
outreach was still very low despite the huge demand in the country. There also lacked
a comprehensive study on the effect of outreach on growth of microfinance
institutions especially in Nakuru County, one of the key regions for the socioeconomic
development of the country, even as the country strives to achieve its goals
envisioned in Vision 2030. The study used primary data collected through
questionnaires. The questionnaires were dropped at the respondents’ MFIs and picked
later. The study population comprised of all seven microfinance institutions operating
in Nakuru County as at the time of study. Responses were received from five
microfinance institutions translating to 71.4% of the target population. The data
collected was analyzed using descriptive statistics. The findings of the study revealed
that number of clients greatly impacted on the growth of MFIs in Nakuru County and
these MFIs placed strong strategies to increase customer numbers. The number of
business units or outlets also increased growth by virtue of being able to reach a
higher number of clients who would take up loans with the respective MFIs. Another
aspect of outreach -value of liability savings/deposits helped the MFIs in the study to
advance bigger loans which enhanced growth. These aspects of outreach greatly
impacted on the growth of MFIs, that is, they contributed to the increase of assets by
these institutions. In conclusion therefore it is apparent that the level of outreach
determines to a great extend the rate of growth of any particular microfinance
institution and there is therefore a dire need to put in strategies to grow customer
numbers, have candid deposit mobilization campaigns as well as try to penetrate the
majority rural unbanked population through opening of more branches and agencies.
This will ensure financial deepening and inclusion, a key factor in societal
emancipation that ensures economic growth. It is recommended that more research be
undertaken in the field of microfinance growth and outreach and even in other parts of
the country and about how to enhance this outreach so that poverty levels can be
reduced. The same is true of empowering majority of unemployed Kenyans who live
in abject poverty in this part of the Sahara. | en |
