Effect of access to micro financing on financial performance of small and medium sized enterprises in Gikomba market, Nairobi county
Small and Medium Enterprises (SMEs) play an important role in the socio-economic development of any country. They provide an appropriate channel for the achievement of national macroeconomic objective in terms of employment generation at low investment cost and enhancement of apprenticeship training. The objective of the study was to determine the effect of access to micro financing on financial performance of small medium enterprises in Gikomba Market, Nairobi County. The study adopted descriptive research design. The study used a sample of 125 respondents out of whom 75 responded. Data analysis was done using SPSS version 20.0. The study established that the entrepreneurs in the study area accessed different amounts of loan. The study also established that accessibility to microfinance affected the performance of SMEs to a great extent. On the influence of savings and deposits to financial performance of SMEs, the study established that savings allowed the entrepreneurs a chance to borrow from the banks and also measured their revenue generation capacity. The study also established that entrepreneurial development played a key role in the performance of SMEs. The study concludes that the accessibility of credit from credit facilities affects the financial performance of the SMEs to a very great extent. The study concludes that the some of the SMEs traders at Gikomba market have been able to make savings while others have not through their respective MFIs. The study also concludes that the training has improved the management skills of the entrepreneurs in Gikomba in financial management, record keeping and business management. This study therefore recommends that the management of MFIs revise their lending policies and requirements so as to ensure that most of the traders can be able to access credit more easily. The study also recommends that the MFIs use that traders savings as part of collateral since most may not have large tracts of land or the physical collateral needed. The study also recommends that the training on investment monitoring be offered more hours since it was established that the traders had not improved their skills in the area.