The Impact of Microfinance on Formal Financial Sector Development in Kenya

Abstract

The importance of the financial system to economic development is well understood and Kenya's long-term national strategy, Vision 2030, identified the sector as one of the country's core growth pillars. Key to the success of the Kenya's financial system is the microfinance. Its contribution in the economic development of Kenyan economy through the promotion of micro and small enterprises is now widely recognized as a viable and dynamic strategy for achieving national goals, including employment creation and poverty alleviation. Despite the grandeurs role played by this sector, studies are limited in terms of showing the impact of microfinance on the financial sector development. This research sought to evaluate the contributions of microfinance towards financial sector development in Kenya.