Gender influnce on group lending repayment behaviour among the micro-finance service providers in Kirinyaga District, Kenya

Abstract

Group lending methodology has become famous among the Micro Finance Institutions that are targeting the low income earners. These are the people who are not able to provide convectional collaterals as a way of securing loans. This approach has become successful in most MFls despite the challenges that are associated with this.

This study was carried out to analyze the influence of gender in loan repayment in group lending approaches amongst the micro finance institutions in Kenya, a case of Faulu Kenya, Fountain Enterprises Program and Jenga Kenya Bank in Kirinyaga district of Central province. The main objective of this study was to establish whether gender influences the loan repayment behaviour amongst the MFI in Kenya by analyzing gender group management, nature of the group of the gender and loan experience as the independent variables and loan repayment as the dependent variable. Purposive sampling technique was used as the study targets group loan officers only. Questionnaires were used to collect data which was coded and analyzed and presented in percentage and frequency Tables.

The researcher found out that there is gender influence on loan repayment behavior among the Micro Finance Institutions. Specifically. the researcher found out that the nature of gender; the gender management skills; the gender loan experience and the gender loan strategies determine the success of loan repayments in group lending approaches. The researcher thus concluded that these variables should be factored during group formation to enhance the success rate in group lending models.

The researcher recommended training for both loan lending officers and loanees in leadership and entrepreneurial courses and thorough analysis of the variables that determine loan repayment prior to loans disbursements. The researcher hoped that findings of this research will be of immense benefit to the MFls while making prudent lending decisions or considering funding right from the initial stage of group formation.