Influence of revolving loans among self help groups in financing household projects in Laikipia East District, Kenya
The revolving loan is an important component in financing of projects and it's therefore important to assess how it influences financing of household projects in Laikipia East District. Revolving loans have been implemented in various countries including America through the Green Revolving Loans, in Bangladesh through the Grameen Bank and also in Belize through the Belize Rural Women Association in Central America. In Africa it includes South Africa through the Eastern Cape smallholder support Project. In Kenya revolving loans is also being implemented through various funds like the Women Enterprise Fund, Poverty Eradication Fund and Youth Enterprise fund among others. The researcher in this study therefore sets out to establish how revolving loans generated by individual members in groups and not that which is borrowed from externally can influence financing of household projects in the district. These social groups in Kenya are not registered under any law in Kenya other than the Presidential decree of 1964. The objectives of this study were establishing how revolving loans in groups, choices of project by borrowers, source of funds and default of the loans influence financing of household projects in Laikipia East District. The study also tried to answer to what extent does revolving loans, choices of projects, sources of funds and default of revolving loans in self help groups influence financing of household projects in Laikipia East District. The study intended to identify benefits and risks and how to manage them, increase awareness, investments and accessibility. This would increase more community participation and revolving loans and projects sustainability. Questionnaires with both closed and open ended questions were used to collect data from the respondents. Observation and interview methods were also be applied in the process. The study also used both primary and secondary data available for the purposes of acquiring information and for triangulation. In analyzing the data it was refined and cleaned to eliminate any unwanted information, then coded and classified into categories. Findings were then presented in tables and figures and then interpreted. The study revealed that revolving loans, choices of projects, sources of funds did really to a great extent influence financing of projects unlike the default of loans which only influenced only to a certain extent as default was ably controlled. The study recommends that there is need for a policy to regulate groups' formation and management as groups were found to be very important channels for revolving loans delivery to ensure revolving loans are well managed for project implementation, profitability and sustainability. The study further recommends that further studies can be done to explore how the devolved structures of the new government as proposed in the new constitution will affect formation and management of self help groups and hence the revolving loans in the groups. it is also important to study how capacity building in groups can affect management of revolving loans in self help groups and hence identify how it will influence financing of projects.