Accessibility to financing by micro and small enterprises in Kenya : a case of Gikomba Market Nairobi
Small and Medium Enterprises (SME's) are important for raising the economic efficiency of a country. They are breeding grounds for entrepreneurship, innovations and inventions hence a reservoir for employment. Sustainable jobs, creates income which in turn reduces the level of poverty. In Kenya, the SME's have not grown to any notable impact often citing lack of finance. The Kenyan financial system is marked by a dualistic structure. It is characterized by the existence side by side of formal and informal financial markets. The informal suppliers of credit make up in part for the provision of the financial services. This then raises the issue on what determines whether the financial institutions will advance to the SME's credit.The objective of the study was to investigate the accessibility to financing availability by SME's in Kenya, with a special reference to Gikomba Market in Nairobi. The constraints faced in accessing formal credit and the awareness of the financing from the formal sources to the SME's was addressed. The study was intended to be of help to individual entrepreneurs, investors, banks, micro finance organization, and the government as well as other researchers and in creating and facilitating enabling credit policies to SME's in Kenya.The study used stratified random sampling and then applied the simple random sampling to select respondents from the selected stratas. There were 10 categories of respondents or stratas where 10 respondents were picked randomly from each category and therefore, 100 respondents were studied. Data was gathered using questionnaires. and observations.The data was analyzed by using statistical package for social sciences (SPSS). It was then presented in tables, graphs, and pie chart and cross tabulations. Based on the. findings, data and descriptive statistics were provided as well as the conclusions of the findings and recommendations.The research results revealed that institutional credit to SME's has been substantially used despite the current strong interest of the credit. Interest rates, collateral requirement, cumbersome documentation and time involved were investigated and were found out to be some of the factors constraining access to formal credit.