Effects of microfinance services on the performance of small and medium enterprises in Kenya
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In this paper, the effects of micro-finance services on the performance of MSMEs using an explanatory research design was reviewed. And the authors concluded that increasing provision levels of micro finance will result in increased performance of micro enterprise.Abstract:
The Micro, Small and Medium Scale Enterprises (MSMEs) sector in Kenya has grown tremendously over the last two decades but its growth is characterized by low productivity and survivalist enterprises. The sector is however very strategic in providing future employment for the economy. This paper reviews the effects of microfinance services on the performance of MSMEs using an explanatory research design. The study targeted 429 MSMEs registered by the Kiambu Municipal Council and sampled 270 enterprises. The study utilized multiple regression analysis set draw inferences on the study using SPSS statistical package. The study found access to savings schemes, managerial training and loan grace period to be statistically significant in determining the performance of MSMEs. This study concludes that increasing provision levels of micro finance will result in increased performance of micro enterprise. The study makes recommendations for microfinance service providers and policy development partners.
Key words: Microfinance, MSMEs, enterprises, performance, financial services.read more
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References
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Does Microcredit Reach the Poor and Vulnerable? Evidence from Northern Bangladesh
Abstract: Subsidized loans have a history of being diverted to the rich. Yet recently microcredit programs, such as the Grameen Bank in Bangladesh, have become popular among donors and governments as a way to channel funds to the poor. This paper uses a unique panel dataset from two Bangladeshi villages to test if the modern microcredit movement is different from its predecessors. Poverty is measured by levels of consumption. Vulnerability is measured as fluctuations in consumption associated with inefficient risk sharing. We find that subsidized credit is largely successful at reaching the poor and vulnerable. The probability that a microcredit member is below the poverty line is substantially higher than that of a randomly picked household in both villages. In the village where female headed households were found to be vulnerable, nearly half of the female headed households belonged to microcredit programs yet only a quarter of male headed households were microcredit members. While restricting loans to the landless is not effective in reaching the poor and vulnerable, targeting female headed households is.
Journal ArticleDOI
Management of business challenges among small and micro enterprises in nairobi-kenya
M Bowen,M Morara,M Mureithi +2 more
TL;DR: In this paper, the authors employed stratified random sampling to collect data from 198 businesses using interviews and questionnaires and concluded that business success is a consequence of embracing a mix of strategies.
Book
Microfinance and poverty reduction
Susan Johnson,Ben Rogaly +1 more
TL;DR: In this article, the authors present the design of savings and credit schemes for poor people, and assess the impact of these schemes on social relationships in the context of microfinance.
Journal ArticleDOI
Does microcredit reach the poor and vulnerable? Evidence from northern Bangladesh
TL;DR: In this paper, the authors evaluate whether micro-credit programs such as the popular Grameen Bank reach the relatively poor and vulnerable in two Bangladeshi villages using a unique panel dataset with monthly consumption and income data for 229 households before they received loans.
Journal ArticleDOI
Microfinance and Poverty in Bolivia
TL;DR: In this article, a small-sample survey on four micro-finance institutions, two urban and two rural, using a range of poverty concepts: income (generated both through the borrower's enterprise and through the labour market), asset holdings and diversity, and various measures of vulnerability.