The Effect of Microfinance Services on Financial Performance of Small and Medium Enterprises in Kawangware, Nairobi County- Kenya

Abstract

The study sought to investigate the effects of Microfinance finance services on financial performance of small and medium enterprises. The study specifically sought to find the effect of Micro-credit (loans), training, Micro-savings and Insurance services on financial performance of SMEs. The research design used was descriptive survey study. The researcher used primary data which was obtained through self administered questionnaire with closed and prose questions. SPSS was used to perform the analysis as it aided in organizing and summarizing the data. The analyzed data was represented in tables, charts and crosstabs. The study established that the four microfinance services; micro-credit (loans), savings, training and insurance have significant effect on the financial performance of SMEs. The study recommended that the government and the MFIs regulating bodies support MFIs to facilitate their growth and increase capacity. It is through this support that MFIs can be able to reach more SMEs.