Influence of microfinance services on the growth of small and micro enterprises at Dagoreti corner in Nairobi county, Kenya
Abstract
The contribution that Small and Micro Enterprises (SME) sector makes to their respective
communities and economy at large is now commonly recognized and thus there are high
expectations of the SME sector. The purpose of the study was to assess the influence of
Microfinance Services on the growth of Small and Microenterprises. To achieve this
purpose, the study was guided by four research objectives including: investigating the
influence of microfinance services on provision of capital to the SMEs in Kenya;
assessing the influence of microfinance services on economic empowerment of the SMEs
in Kenya; investigating the influence of microfinance services in promoting
entrepreneurship in Kenya; and examine the influence of microfinance services provision
on management skills development in the SMEs in Kenya. The study focused on the
MFIs and SMEs within Dagoreti Corner area in Nairobi County. Nairobi County is
preferable because it’s the capital city and most of the MFIs are within the county.
Dagoreti Corner has a lot of SMEs in different industries that ensured the information
received was unbiased and logical. Dagoreti corner has a large population of young
people who would benefit from MFIs to develop and grow their SMEs. This study used
descriptive survey research design. The population of this study comprised of the 197
SMEs within Dagoreti Corner. The study specially sought to interview SME owners as
they are the ones involved in decision making on matters concerning rising of capital.
This study used stratified random sampling to sample 60 respondents. The study used a
questionnaire in order to collect data. The questionnaire had both open and close ended
questions. The completed questionnaires were checked for completeness to ensure
consistency. The data was then coded to enable the responses to be grouped into various
categories. The findings were presented by use of Tables and graphs. From the findings
51% said that MFI has influenced the provision of capital to a great extent. Those who
said that MFIs influenced economic empowerment to either a great extent or very great
extent were 60%, 56% said that MFIs influence economic empowerment to either a very
great extent or great extent and 49% said that MFIs influence management skills
development to a very great extent. From the findings the study concluded that MFIs
have increased the accessibility of loans due to reduced need for collateral. The study
also concluded that there is flexibility of payments due to the reduced and flexible
interest rates which enabled entrepreneurs to increase their savings, increased their
confidence and financial management. The study made the following recommendations
that the entrepreneurs come up with strategies that will highlight those other factors as
well as develop measures in which to counteract with them, that MFIs offer training on
how the employees can improve the performance of their business through better
strategic management skills, that the government develop policies that will ensure
training of management skills among all entrepreneurs and that MFIs increase their
training frequency and target a larger market so as to improve the performance and
promote the growth SMEs which will contribute to the growth of the economy.
Citation
Master of arts in project planning and management of university of nairobi, 2014Publisher
University of Nairobi
Collections
- Faculty of Education (FEd) [5977]