The Effect of Microfinance Institutions Services on Performance of Women Groups in Machakos County

Abstract

The purpose of this study was to establish the effect of microfinance institutions services on performance of women groups in Machakos County. The study objectives were to determine the effect of credit facilities, training programmes and savings and loans on performance of women groups on Machakos County. This study adopted a descriptive research design. The target population were the 10,000 respondents drawn from the registered women groups in Machakos County. From each of the group, the researcher chose on 5 women through purposive sampling technique. This brought the actual sample size to 2500 women/respondents. Primary data was collected from the women groups using questionnaires. The study concluded that the women groups have access to very flexible credit facilities, without collaterals except the members’ contributions. The loans are easily processed which has enabled them to improve on their business activities and experience more profits. Further the women have been empowered with entrepreneurial and management skills, have been able to attend various training programmes offered by the MFIs and others have managed to further their level of education. This has given them the chance to maximize on their profits and deal with the challenges facing them effectively. At the same time, the MFIs act as a form of insurance for the businesses run by the women groups and therefore they feel safe to work with the MFIs. Further the members’ saving has given the women self-confidence in running their businesses because they are able to guarantee one another loans for business startup and expansion. The skills acquired during training have also enabled the women to venture into business opportunities they initially thought were beyond their capabilities. Overall the study found that credit facilities, training programmes and savings and loaning services by MFIs, has a significant effect on performance of women groups in Machakos County. Specifically, training programmes has the greatest effect, followed by savings and loans at while credit facilities had the least effect. This implies that human capital is very important in every aspect of entrepreneurship as other factors impinge of the entrepreneur’s skills and knowledge. From the findings the study recommends that more resources should be directed towards women empowerment programmes as the ripple effect is always reflected in the economic power. The Government should ensure that all the parts of the country have the MFIs within the women’s reach so as to enable them maximize their opportunities in financial growth. Further the study recommends that the MFIs invest more on entrepreneurship to enable the women to effectively manage the funds they receive from the MFIs. At the same time, other mainstream financial institutions should assess the performance of the MFIs and seize the opportunity by investing on products that are friendly to the low cadre population in the society since they are the majority. Finally the women should encourage their friends who are not members to any of the groups to join them in their financial journey. This will reduce on cases of poverty by a very significant margin in the end