Micro Financing as a Strategic Approach to New Venture Support and Growth in Micro Finance Institutions in Nairobi County
Abstract
Microfinance ensures the provision of financial services to the low income households,
micro and small enterprises, and in turn provides an enormous potential to support the
economic activities of the poor and thus contribute to poverty alleviation. It has been
estimated that formal microfinance bank only serves less than one million clients in a
country where over 60% of the country population of 40 million lives below poverty line.
The objectives of this study were to: establish the extent to which MFI in Kenya have
adopted microfinance as a strategic approach and to determine the role of microfinance in
new venture support and growth in Kenya. This study was carried out through a crosssectional
descriptive survey. The population of interest in this study consisted of all the
MFIs in Nairobi County. There were 59 MFIs in Kenya as per the registered list of
Association of Micro Finance Institutions 2012. Given that the number was small, a
census survey was recommended. This study used a questionnaire to collect primary data
for the study. The respondents of the study were the Chief Executive Officers (CEOs) of
the MFIs. The data was then analyzed using descriptive statistics to summarize the
pattern of findings. This involved the use of frequencies, percentages and means.
Percentages were used to summarize and reflect the relative weight of micro financing as
a strategic approach to new ventures support and growth. Mean was used to determine
the magnitude of the weight a particular condition was given. The analyzed data was
presented in tables and graphs. The findings of this study show that new venture support
and growth through training and the supportive regulatory framework have a direct and
significant relationship with MFIs set products for new ventures which ensure their
growth. The study recommends that MFIs should design product packages that support
new ventures engagement in more profitable, but nontraditional economic activities by
bundling credit with additional services or by helping new ventures connect with
agencies or groups where they can obtain support that will foster new venture growth.
Keywords: Credit facilities, Levels of income, Collateral, Interest rates, Economic
growth and development, Micro and small enterprises.
Citation
Degree Of Master Of Business AdministrationPublisher
University of Nairobi School of Business
Description
A research project submitted in the partial fulfillment of the requirement for the award Of Degree Of Master Of Business Administration, School Of Business, University Of Nairobi