Factors Influencing Access to Credit Facilities by Women Entrepreneurs in Kisii County

Abstract

Women constitute around half of the total world population but unfortunately this is not commensurate with the number of enterprises owned and managed by women. Various reasons have been given for this difference with the main one being that women entrepreneurs are unable to access as much credit facilities to grow and expand their businesses accordingly. The purpose of this study was to investigate factors influencing access to credit facilities by women entrepreneurs in Kisii town, Kisii County. The study was guided by objectives such as influence of lending conditions, cost of credit, and role of credit servicing history as well as influence of information access on credit facilities by women entrepreneurs in Kisii town. Clearly these are factors at play that hinder women from accessing credit facilities to enable them run small and medium enterprises successfully hence contribute effectively to the much needed economic growth and development of their communities. Study delimitations ranged from women entrepreneurs in the wholesale businesses, fast food vendors, second hand cloth vendors, and production as well as hotel entrepreneurs. These women entrepreneurs compromised the target population of 2,230 enterprises licensed to carry out businesses by the Kisii county business licensing board. Survey research design was used to collect data from the target population. Validity and reliability of the instruments was ensured by test, retest techniques, while permission to collect data was granted by the Ministry of Higher Education, Science and Technology. Data was analyzed by use of percentages and frequencies. The study found that certain demographic characteristics encouraged aggressive entrepreneurial skills and of pursuit of credit facilities. Women both married and widowed were better placed to take initiatives for aggressive mobilization of business funds from commercial lending institutions, probably fueled by family financial demands and being sole breadwinners in the latter cases. The level of education revealed glaring academic challenges amongst the women entrepreneurs as the results indicated 40.5% as being below certificate education, while 37.74% had certificate, diploma at 17.92% whilst degree holders only managed 0.377%. Such statistics indicate that women entrepreneurs were unlikely to obtain requisite business operation strategies bordering on credit access for business investment. Similarly, the study variable of cost of credit revealed that women entrepreneurs often felt the prohibitive cost of credit with 78.3% strongly agreeing that cost of credit in form of prevailing interest rates deterred their access to credit. Therefore, there is an urgent need to tailor special interest rates to the more vulnerable groups in the communities. Lending conditions imposed on the women entrepreneurs were rigid and rigorous and this ended up forcing them to resort short term loans ranging from minimal amounts of 10,000 to 50,000. These could hardly address the financial requirements of modern businesses which operate in highly competitive and ever changing business environment. The women entrepreneurs also faced a challenge of access to information, with the highest number indicated making expensive trips to banks to access credit related information. The results further revealed that entry into entrepreneurship was more a product of environmental factors and heredity. There is therefore, a strong need to encourage entrepreneurship as an alternative healthy way of earning a living rather than depending on the ever elusive formal employment. The study strongly recommends formation of policies that entrench entrepreneurship in the domains of the world of academic as an alternative to economic development, as a result clearly seen in the fast developed Asian countries that embraced it earlier