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Journal ArticleDOI

Effects of microfinance services on the performance of small and medium enterprises in Kenya

14 Mar 2015-African Journal of Business Management (Academic Journals)-Vol. 9, Iss: 5, pp 206-211
TL;DR: 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.

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Citations
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Journal ArticleDOI
TL;DR: In this paper, the authors explore new evidence about financial innovation in small and medium enterprises (SME) financing impact on SME development in Bangladesh from 1985 to 2016, and propose a model to evaluate the impact of financial innovation on SMEs.
Abstract: With this study, we try to explore new evidence about financial innovation in small and medium enterprises (SME) financing impact on SME development in Bangladesh from 1985 to 2016. To bring insigh...

36 citations


Cites background from "Effects of microfinance services on..."

  • ...Capital adequacy and revenue maximization are positively correlated (Rahmat and Maulana 2006; AkotoSampong 2011; Fauster 2014; Irene, Charles, and Japhet 2015)....

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Dissertation
01 May 2017
TL;DR: In this paper, a research project submitted to the Department of Economic Theory in Partial Fulfillment of the Requirement for the Award of the Degree of Masters of Economics in Policy and Management, of Kenyatta University July, 2017
Abstract: A Research Project Submitted to the Department of Economic Theory in Partial Fulfillment of the Requirement for the Award of the Degree of Masters of Economics in Policy and Management, of Kenyatta University July, 2017

10 citations

Journal ArticleDOI
TL;DR: The MAL-ED South Africa, biomedical research project, had positive effects on tangible and intangible assets that compose the sustainable livelihoods of community-based fieldworkers, however, the field workers expressed the need to acquire social skills to enable them carry out their duties more efficiently.
Abstract: Researchers involved in biomedical community-based projects rarely seek the perspectives of community fieldworkers, who are the ‘foot soldiers’ in such projects. Understanding the effect of biomedical research on community-based field workers could identify benefits and shortfalls that may be crucial to the success of community-based studies. The present study explored the perceptions of community-based field workers on the effect of the Etiology, Risk Factors and Interactions of Enteric Infections and Malnutrition and the Consequences for Child Health and Development Project" (MAL-ED) South Africa on their tangible and intangible capital which together comprise sustainable livelihoods. The study was conducted in Dzimauli community in Limpopo Province of South Africa between January-February 2016. The sustainable livelihoods framework was used to query community-based field workers’ perspectives of both tangible assets such as income and physical assets and intangible assets such as social capital, confidence, and skills. Data were collected through twenty one individual in-depth interviews and one focus group discussion. Data were analysed using the Thematic Content Analysis approach supported by ATLAS.ti, version 7.5.10 software. All the field workers indicated that they benefitted from the MAL-ED South Africa project. The benefits included intangible assets such as acquisition of knowledge and skills, stronger social capital and personal development. Additionally, all indicated that MAL-ED South Africa provided them with the tangible assets of increased income and physical assets. Observations obtained from the focus group discussion and the community-based leaders concurred with the findings from the in-depth interviews. Additionally, some field workers expressed the desire for training in public relations, communication, problem solving and confidence building. The MAL-ED South Africa, biomedical research project, had positive effects on tangible and intangible assets that compose the sustainable livelihoods of community-based fieldworkers. However, the field workers expressed the need to acquire social skills to enable them carry out their duties more efficiently.

7 citations


Cites background from "Effects of microfinance services on..."

  • ...This supports the argument that lack of assets among the rural poor reduces their access to credit [22]....

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  • ...livelihoods [22] and rely on their accumulated assets as collateral when they apply for loans from micro-finance...

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Posted Content
TL;DR: In this paper, the impact of access to formal credit on enterprise performance has been investigated, showing that firms that are credit constrained have significantly lower output per worker, capital per worker and investment in fixed assets for expansion compared to those that are not credit constrained.
Abstract: The main focus of this study is to ascertain the impact of access to formal credit on enterprise performance. The study uses Nigerian Enterprise Surveys data for 2010 to construct a direct measure of credit constraint. From propensity score estimations, the results show that access to formal credit matters and has a significant impact on enterprise performance indicators. Firms that are credit constrained have significantly lower output per worker, capital per worker, employment of labour and investment in fixed assets for expansion compared to firms that are not credit constrained. This is more pronounced for women-owned enterprises after adjusting for bias in the estimations and controlling for sampling weights. This suggests that one way to support the growth of enterprises in Nigeria is to make access to formal credit less stringent. Also, government and monetary authorities should support credit expansion policies for medium and small enterprises in Nigeria.

6 citations

References
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01 Jan 1998

317 citations


"Effects of microfinance services on..." refers background in this paper

  • ...Many need skills training or other inputs to make their enterprises a success (Ledgerwood, 1998)....

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  • ...This also improves their ability to manage working capital needs through borrowing and savings at different times as required (Ledgerwood, 1998)....

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  • ...Most MFIs prefer to focus on existing businesses, with perhaps a small portion of their portfolio invested in start-up businesses, thereby reducing their risk horizon (Ledgerwood, 1998)....

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Journal ArticleDOI
TL;DR: A collection of selected papers from the 1995 Conference on "Finance Against Poverty" is presented in this paper, where the main themes point to recognizing heterogeneity of the poor and its implications for program and institutional design, evaluating the limitations imposed by the policy and regulatory environment, and solving the challenges posed by institution building.
Abstract: This paper serves as an introduction to the collection of selected papers from the Conference on ‘Finance Against Poverty’, held at Reading, England, March 1995, sponsored by the University of Reading, the University of Manchester, the UK Overseas Development Administration, the Norwegian International Development Authority, and the World Bank. The papers in this collection represent only a small fraction of the more than 45 papers presented by scholars, practitioners and donor agencies at the Conference. They have been selected in an effort to give a sense of the richness and variety of the conference deliberations—and as expressing some of the key themes and concerns which emerged. In this introduction—as at the conference—the importance of building sustainable financial systems for poor men and women is emphasized. The main themes point to recognizing the heterogeneity of the poor and its implications for program and institutional design, evaluating the limitations imposed by the policy and regulatory environment, and solving the challenges posed by institution building.

121 citations

Journal ArticleDOI
TL;DR: The authors analyzes panel data on 297 new small enterprises in Romania with detailed annual information from the start-up date through 2001, showing that access to external credit substantially increases both employment and sales growth.
Abstract: Although the development of a new private sector is generally considered crucial to economic transition, there has been little empirical research on the determinants of start‐up firm growth. This article analyzes panel data on 297 new small enterprises in Romania with detailed annual information from the start‐up date through 2001. Controlling for heterogeneity with a rich set of firm characteristics and firm fixed effects, our panel regressions imply that access to external credit substantially increases both employment and sales growth. Entrepreneurial characteristics such as gender and education have weaker estimated effects. Neither technical assistance nor a wide variety of measures of the business environment (contract enforcement, property rights, and corruption) have any clear association with firm growth.

116 citations

Book
01 Jan 2000
TL;DR: In this article, the authors present results and reflections from ongoing policy analysis and research activities at the Institute of Macroeconomics, Real Sector (Agriculture and Industry), Social Sector (Education and Health) and Governance and Development.
Abstract: This discussion paper is released under IPAR's research and policy activities in the Real Sector. The interpretations, views, and conclusions are entirely those of the authors and should not be attributed to the Institute or its affiliated organizations. IPAR Discussion Papers Series disseminates results and reflections from ongoing policy analysis and research activities at the Institute. There are four key programs in the Institute: Macroeconomics, Real Sector (Agriculture and Industry), Social Sector (Education and Health) and Governance and Development. The main objective of the discussion paper is to make the results available quickly so as to encourage discussions, receive suggestions for revisions, and prompt application of the analyses and results they contain. A summary of the key findings is also available in the Policy Brief Series. The papers represent preliminary or ongoing work.

105 citations


"Effects of microfinance services on..." refers background in this paper

  • ...enterprise management, Moullin (2003) defines an organization’s performance as “how well the organization is managed” and “the value the organization delivers for customers and other stakeholders....

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  • ...Small businesses tend to have a poor collateral base and therefore get excluded from the credit market (Kimuyu and Omiti, 2000)....

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BookDOI
Ajai Nair1
TL;DR: Nair et al. as discussed by the authors explored the merits and constraints of federating women's self-help groups (SHGs) and suggested that federations could help SHGs become institutionally and financially sustainable because they provide the economies of scale that reduce transaction costs and make the provision of these services viable.
Abstract: The major form of microfinance in India is that based on women's Self Help Groups (SHGs), which are small groups of 10-20 members. These groups collect savings from their members and provide loans to them. However, unlike most accumulating savings and credit associations (ASCAs) found in several countries, these groups also obtain loans from banks and on-lend them to their members. By 2003, over 700,000 groups had obtained over Rs.20 billion (US$425 million) in loans from banks benefiting more than 10 million people. Delinquencies on these loans are reported to be less than 5 percent. Savings in these groups is estimated to be at least Rs.8 billion (US$170 million). Despite these considerable achievements, sustainability of the SHGs has been suspect because several essential services required by the SHGs are provided free or at a significantly subsidized cost by organizations that have developed these groups. A few promoter organizations have, however, developed federations of SHGs that provide these services and others that SHG members need, but which SHGs cannot feasibly provide. Using a case study approach, Nair explores the merits and constraints of federating. Three SHG federations that provide a wide range of services are studied. The findings suggest that federations could help SHGs become institutionally and financially sustainable because they provide the economies of scale that reduce transaction costs and make the provision of these services viable. But their sustainability is constrained by several factors-both internal, related to the federations themselves, and external, related to the other stakeholders. The author concludes by recommending some actions to address these constraints.

85 citations


"Effects of microfinance services on..." refers background in this paper

  • ...Microfinance is also defined as provision of small- scale financial services to the low- income people (Robinson, 2001; Nair, 2001)....

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