Influence of microfinance services on empowerment of women entrepreneurs in Kibera constituency, Nairobi county, Kenya

Abstract

This study sought to examine the influence of microfinance services on empowerment of women entrepreneurs in Kenya, with a specific focus on Kibera Constituency, Nairobi County. The study objectives focused on microfinance credit facilities, micro finance savings, micro finance training and collateral requirements as influencers of the empowerment of the women entrepreneurs in Kibera Constituency. The research methodology of this study was a descriptive survey design with the research targeting women entrepreneurs engaged in small scale trade in Kibera Constituency who have sought microfinance services. The total target population consisted of 450 women entrepreneurs and the sample size was 216 respondents, with 6 of these respondents being key informants in the study. The analysed data was tabulated for presentation, with frequency distribution and percentages used to show the relationships between the variables of the study. The findings on microfinance credit facilities indicated that the women were appreciative of the loans they received but they felt they would benefit if they got larger amounts, which would translate into larger incomes. Some respondents were able to save some money to put back into their businesses, but a majority barely got by from their income and saved even less after obtaining loans. In terms of training, they attended and reported to have benefited from it, but on the ground it did not seem to have translated to better management skills, partly because of the literacy levels of most respondents. Collateral requirements hindered them from obtaining desired loans because most women did not own property such as land or houses in their names. The study recommends that restructuring the collateral requirements by the women entrepreneurs by using credit scoring and business history as alternatives to assetbased security can really be beneficial to all stakeholders. Other documents such as Local Purchasing Orders (LPO‘s) should suffice as loan security. There is also the need to broaden the training manual to include several other business aspects in order to widen the commercial capacity by the women entrepreneurs in Kibera. More training on entrepreneurial skills needs to be undertaken, but it should be couched in a user-friendly language. Competitive and flexible interest rates that will encourage more women to borrow more frequently should be introduced, because there is evidence that there is a hunger for affordable credit among the respondents. It is also evident that these microfinance services are impacting the lives of women entrepreneurs in Kibera. Women should also be allowed to draw part of their Table Banking savings for emergency purposes, with each case being individually assessed. This will reduce their usage of business capital for personal situations. These findings may be used by policy makers and institutions especially those in the microfinance services to develop policy framework which will take care of gender issues in micro financing in Kenya.