Dissertation•
Impact of microfinance services on financial performance of small and micro enterprises in Kenya
01 Nov 2010-
TL;DR: In this paper, the impact of micro-finance services on financial performance of SMEs in Kenya was investigated using a systematic random sampling method with an interval of 50 SMEs and the sample size was 47 SMEs.
Abstract: The potential of using institutional credit and other financial services for poverty alleviation in Kenya is quite significant. About 18 million or 60 % of the population are poor and mostly out of scope of informal banking services. According to the National Micro and Small Enterprise Baseline survey of 1999, there are close to 1.3 million SMEs employing nearly 2.3 million people or 20% of the country's total employment and contributing 18% o f the overall GDP and 25% non agricultural GDP. Despite this important contribution only 10.4% of the SMEs receive credit and other financial services. The formal banking sector in Kenya over the years has regarded the informal sector risky and not commercially viable. The purpose of the study was to establish the impact of microfinance services on financial performance of SMEs in Kenya. Survey method was employed in this study. The study population consisted of all SMEs in Nairobi. The study adopted systematic random sampling method with an interval o f 50 SMEs. The sample size was 47 SMEs. The researcher used primary' and secondary data. Primary' data was collected through the use of semi-structures and structured questionnaires. Quantitative data was analyzed using descriptive and inferential statistics. The study found that all SMEs borrow investment capital and they use it for the purpose in which they were borrowed, most o f them do not have other source of financing other than from micro-finance institutions and they did not have other form of financing before they started receiving financing from microfinance institutions.. Based on the findings, the study concludes that SMEs got savings services, credit services and training services from SMEs. The SMEs mostly borrow investment capital and use the loan(s) for the purpose which they were taken. The study revealed that most of the SMEs do not have other source of financing other than that from micro-finance institutions. The study finally concludes that ROA increased with each consecutive loan showing that microfinance services enhance financial perfonnance o f SMEs in Kenya. From the study findings, the study recommends that in order to enhance the impact of microfinance services on financial performance of SMEs in Kenya, the MFIS should train the borrowers on entrepreneurial skills so as to enhance their competence. The MFIs should also consider the performance of the business before allocating money to the business ow ners.
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Dissertation•
01 Oct 2013
TL;DR: In this paper, a management research project submitted in 2017 is described as "a partial fulfillment of the requirements of the requirement of the prestigious MBSA award of masters of business administration (MBA) of the University of Nairobi".
Abstract: A management research project submitted in
partial fulfillment of the requirements of the
award of masters of business administration (MBA),
school of business, university of Nairobi
9 citations
Cites background from "Impact of microfinance services on ..."
...Mbugua (2010) studying on the impact of micro finance services on financial performance of SMEs in Kenya found that micro finance services enhance financial performances of SMEs. Ngugi (2009); Kioko (2009); Makena (2011) studied on the financial challenges faced by SMEs and found that inadequacies in access to finance are key obstacles to SMEs growth....
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...Mbugua (2010) studying on the impact of micro finance services on financial performance of SMEs in Kenya found that micro finance services enhance financial performances of SMEs. Ngugi (2009); Kioko (2009); Makena (2011) studied on the financial challenges faced by SMEs and found that inadequacies in access to finance are key obstacles to SMEs growth. Kemei (2011) studied on the relationship between microfinance services and financial performance of SMEs. The findings were that positive and significant relationships have been established between MFIs loans and SMEs performance. Kimoro (2011) in a study on the impact of microfinance services on...
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...Mbugua (2010) studying on the impact of micro finance services on financial performance of SMEs in Kenya found that micro finance services enhance financial performances of SMEs....
[...]
...Mbugua (2010) studying on the impact of micro finance services on financial performance of SMEs in Kenya found that micro finance services enhance financial performances of SMEs. Ngugi (2009); Kioko (2009); Makena (2011) studied on the financial challenges faced by SMEs and found that inadequacies in access to finance are key obstacles to SMEs growth. Kemei (2011) studied on the relationship between microfinance services and financial performance of SMEs....
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29 Jan 2016
TL;DR: In this article, the impact of micro finance on the growth of small businesses in Kenya has been investigated and it is concluded that micro finance services have a major effect on the small business growth in the country.
Abstract: The Small business sector has continued to play an important role in the Kenyan Economy. The sector’s contribution to the Gross Domestic Product (GDP) increased from 13.8% in 1993 to over 18% in 1999. The Economic survey of 2012 estimated that the contribution to the GDP of this sector currently stands at over 25%. It is the objective of every small business to grow into large enterprises. This paper seeks to identify the impact of Micro financing on Small Business Enterprises in Kenya. Specifically, this study proposes to establish the impact of Microfinance institutions (MFI’s) on Kenyan Small and Medium Enterprises, to establish the products offered by MFI’s to Kenyan small and medium enterprises and to establish why some customers are dropping off MFI’s. The provision of financial services, especially credit plays an important role in the development of the economy. From the relevant studies done in this area and the accompanying literature review, Micro finance organizations provide financial services to their clients (small scale entrepreneurs), such as savings and credit services to finance their new business startups in order to engage in productive economic activities and thus contribute to the development in low income population. Thus, their growth has been attributed to the availability of micro credit opportunities in the country. It can thus be concluded that micro finance services have a major effect on the growth of Small businesses in Kenya. This concurs with Koech (2011) that the factors affecting growth Small businesses were capital markets, cost, capital access, collateral requirements, information access, capital management and cost of registration. Thus, micro finance services have made it possible for the poor to start small and medium enterprises in Kenya.
8 citations
Cites background from "Impact of microfinance services on ..."
...Mbugua (2010) studying on the impact of micro finance services on the financial performance of SMEs in Kenya found that micro finance services enhance financial performances of SMEs. Morduch (1999) and standard financial systems note that microfinance is not a panacea, but it is a main tool that fosters development in developing countries....
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...Mbugua (2010) studying on the impact of micro finance services on the financial performance of SMEs in Kenya found that micro finance services enhance financial performances of SMEs....
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Dissertation•
01 Jan 2014
3 citations
Dissertation•
01 Jan 2019
1 citations
Peer Review•
TL;DR: In this article , the effects of search engine marketing on performance of top 100 medium-sized companies in Nairobi City, Kenya was investigated, and the authors concluded that search engine marketers capture the audience's attention at the right time, which means the organization gets content and advertisements in front of a very interested target audience that is actively looking for comparable deals, all for a low cost and without having to impose on them.
Abstract: : The value and importance of medium-sized businesses in a knowledge-based economy has long been recognized. Medium-sized businesses, on the other hand, face enormous difficulties and dangers in order to thrive in a competitive climate. For many organizations, digital marketing for small businesses is unfamiliar territory, and because technology is continuously improving, previous techniques must be updated to fit the current market. As a result, medium-sized businesses confront numerous obstacles when it comes to online marketing. This study therefore, investigated the effects of search engine marketing on performance of top 100 medium sized companies in Nairobi City, Kenya. Descriptive research design was employed. The population consisted of marketing managers of these medium size enterprises within Nairobi City County, Kenya as observed by an annual survey done by KPMG together with the nation media group year 2020. The respondents were sampled using stratified method on the basis of the company category. The respondents were purposively selected. The collection of data was done using questionnaires that was in a structured form. Content validity was used since it has the capability of measuring the level at which a collection of a number of items is representative of what the instrument is intended to achieve. The study assessed the instruments reliability using Cronbach's alpha coefficient. Analysis of the qualitative data was done using content analysis method. Analyses of quantitative was done descriptively by using mean and standard deviation. The determination of the level at which variables link to one another was achieved through inferential analysis involving correlation and regression analysis. Search engine marketing, was found to have a significant effect on the performance of Kenya’s top 100 medium-sized companies. The study concluded that search engine marketing captures the audience's attention at the right time, which means the organization gets content and advertisements in front of a very interested target audience that is actively looking for comparable deals, all for a low cost and without having to impose on them. The study recommended that the organizations should publish relevant, authoritative content because more people visit sites with high-quality content that is tailored to their needs, which raises the authority and relevance of the organization's website.
References
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TL;DR: In this paper, the authors examine the magnitude and determinants of enterprise births, closures, and expansions, and explore the ways in which these different sources of change are influenced by the state of the macroeconomy.
961 citations
Book•
01 Jan 1998
TL;DR: In this article, the authors recognize the limits of the win-win proposition for micro-finance and reach a more constructive dialogue between microfinance advocates that privilege financial development and those that privilege social impacts.
Abstract: Leading advocates for microfinance have put forward an enticing “win-win” proposition: microfinance institutions that follow the principles of good banking will also be those that alleviate the most poverty. This vision forms the core of widely-circulated “best practices,” but as a general proposition the vision is fully supported neither by logic nor by the available empirical evidence. Recognizing the limits to the win-win proposition is an important step toward reaching a more constructive dialogue between microfinance advocates that privilege financial development and those that privilege social impacts.
903 citations
Book•
01 Dec 1998
TL;DR: In this article, the authors present a handbook for the design, implementation, evaluation, and management of micro finance activities, focusing on the provision of financial intermediation and assessing the financial viability of micro-finance institutions.
Abstract: The purpose of this handbook is to bring together in a single source guiding principles and tools that will promote sustainable microfinance and create viable institutions. It provides a comprehensive source for the design, implementation, evaluation, and management of microfinance activities. The book has three parts: part one takes a macroeconomic perspective toward general microfinance issues and is primarily non-technical. Part two narrows its focus to the provision of financial intermediation, taking a more technical approach and moving progressively toward more specific (or micro) issues. Part three, the most technical part of the handbook, focuses primarily on assessing the financial viability of microfinance institutions.
772 citations