Micro-credit and poverty reduction among self help groups within Kisumu County, Kenya
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Date
2019-05Author
Wafula, Metrine
omoro, Nixon O
Type
ArticleLanguage
en_USMetadata
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Purpose: Micro-credit is an informal source of revenue that was established to bridge the
gap between Commercial banks and Formal Micro-finance institutions with an objective of
providing small loans to the poor who were discriminated against due to their economic
conditions. The aim of this study was to evaluate the relationship between micro-credit and
poverty reduction among self-help groups in Kisumu County.
Methodology: The research was mainly anchored on Grameen model which focused on
funding the poor without collateral and vicious cycle of poverty theory which view poor
people as vulnerable hence need to be supported to come out of poverty that is heavily
grounded. The study relied on primary data collected using semi-structured questionnaire
and observation check with the help of research assistants drawn from Organization staff and
group officials. The data collected was analyzed by both quantitative and qualitative methods
with the help of SPSS version 20 and excel package.
Findings: The findings portray mixed results since micro-credit reduces poverty to a certain
level beyond which it starts raising again as measured by changes in the annual income
before and after loan acquisition. The impact of loan was moderate on both the living
standard and business expansion despite of the majority attending trainings related to microcredit and poverty reduction.
Implication: The researchers recommend frequent training to enhance their intellectual
capacity since most have only attained basic education. Training is perceived to be essential
for them to enhance their earning potential by minimizing risks related to book keeping,
business management and financial management. The study used cross-sectional method
and only focused on credit recipients attached to a specific organization thus the findings
may lead to subjective biasness. The researchers therefore recommend further study on the
topic using longitudinal method to achieve significant results over a period of time especially
in Kisumu County.
Value: The finding will help in enhance microfinance models that can add value to both the
clients and the financial institutions. The micro-credit and market linkages, micro-credit and
capacity building programs on the economic performance of SHG members should be treated
as a priority in poverty reduction among the disadvantaged groups.
Citation
Metrine, W., & Omoro, N. O. (2019). Micro-credit and poverty reduction among self help groups within Kisumu County, Kenya 𝘈𝘧𝘳𝘪𝘤𝘢𝘯 𝘥𝘦𝘷𝘦𝘭𝘰𝘱𝘮𝘦𝘯𝘵 𝘧𝘪𝘯𝘢𝘯𝘤𝘦 𝘫𝘰𝘶𝘳𝘯𝘢𝘭, (ADFJ) 3(1)Publisher
University of Nairobi