| dc.description.abstract | Small and micro enterprises (SMEs) have become important players in the Kenyan economy,
but at the same time they continue to face constraints that limit their development. Lack of
access to credit is one of the main constraints, and a number of factors have been identified to
explain this problem. These include the segmented and incomplete nature of financial
markets, which increases transaction costs associated with financial services. On the supply
side, most formal financial institutions consider SMEs uncreditworthy, thus denying them
credit. This study sought to find out the effects of access to credit to the growth of top 100
SMEs in Kenya. Based on the study findings, access to credit facilities positively impacts on
the growth of the top 100 small and medium enterprises in Kenya. Lending institutions
should advance credit to SMEs at a favourable terms. Collateral requirements dampen the
growth of SMEs. This is attributed to low capital base and lack of resources which SMEs can
use as securities to secure loans from the lending institutions. Product and service range
positively influence the growth of SMEs. SMEs that embrace product and services
diversification realizes increase in sales volume which result to more income. The study
recommends that SMEs establish good credit history with the lending institutions so that they
can easily access credit, the government should also intervene and create special lending rate
or SMEs to boost their growth and expansion, SMEs should also increase their capital base
by ploughing back profit earned so as to enhance their collateral security and SMEs should
also diversify their products and services to wade off competition from other sectors so as for
product and service diversification to increase market share and generate more revenue for
the SMEs. | en_US |
