| dc.description.abstract | MSEs play an important economic role in many countries. In Kenya, for example the MSEs sector contribution to GDP has increased from 14% in 1993 to about 20% in 2007 (Mbugua, 2010). Despite these contribution, MSEs face constraints like competition, access to finance, security, regulation and literacy that hinder them from growing into large enterprises. The objective of this study singled out access to finance as a constraint and sought to establish the effects of access to finance by MSEs in Ongata Rongai Township on their growth in investments. The study employed a descriptive design.
The study used Secondary and Primary data where secondary data was sourced from reviewing MSEs existing records while a survey method was used to collect primary data to supplemented the existing information where a pre-designed questionnaire was used. Stratified random sampling was employed to collect data from 50 MSES where the data was analyzed descriptively and presented through figures, tables and percentages. A sample of 50 MSEs was selected from 25 forms of businesses in Rongai using Stratified random sampling technique. The collected data was analyzed using descriptive statistics and multiple regression analysis and presented through figures, tables and percentages.
The findings indicated the following: MSEs face the following challenges; competition among themselves and from large firms, lack of access to finance, insecurity, regulation and human resources literacy among others. There was increase in assets when credit facility was first engaged and investment in assets grew with continued access to finance thus a positive relationship between access to finance and investment growth. On comparison to other constraints of MSEs investment growth, Access to Finance was ranked second after competition while the empirical results revealed that financial access, had the largest significance with an alpha of 0.358 followed by security with an alpha of 0.324, then came regulation at 0.253. The least but significant of the four variables was literacy with an alpha of 0.152.
This shows that financial access remains a major determinant of MSEs investment growth.
From the findings, the following conclusions can be drawn: First, financial access, Regulation, Security, Literacy, competition and other factors like transportation, high rent, and debt collection are all constraints that bar investment growth of MSEs. Secondly, in order of average contribution per MSEs, competition tops the list followed by financial access, security, regulation, and literacy levels in that order. Therefore access to finance plays a big part in determining the level of MSEs investment growth. | en_US |
