Enhancing financial capacities of rural based micro enterprises. A case of Nyandarua district
Gitome, Samuel Kuria
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The important role played by the Micro and Small enterprises in Kenya cannot be ignored. As a growing economy Kenyans are enterprising. This is evident with mushrooming road side small shops and increase in number of entrepreneurs joining Jua Kali sector. The Informal Sector is the solution to high rate of unemployment in the country. It has had a slow growth with individuals pulling out of the sector citing some problems which are financial related. There are studies that have been conducted to establish a lasting solution on financial related problems to micro entrepreneurs e.g Mugera (1988) on cash management in small scale enterprises and Rukunga (1999) who focused on general lack of capital as the primary problem of entrepreneurs. The national baseline survey of 1999 evaluated the many problems facing MSE leading to closure. This project tries to find the solution in MSE's that fills the gap of high rate of business closure in Nyandarua district by enhancing financial capacities. The project reports involves evaluation of objectives leading to investigation of savings strategies adopted by micro entrepreneurs, accessibility of finances, cash management, demand for financial management training. The target population was 285 micro entrepreneurs who employ workers between 4 - 10. The sample includes 168 entrepreneurs chosen using stratified random sampling technique. The questionnaires were analyzed and found that entrepreneurs save without a policy or a strategy thus impending accessibility of credit. Once cash is received it is poorly managed due to poor financial management technique. This creates a high demand of financial training. The project recommends special tailored credit conditions from MSE's adoption of specific saving strategies and stakeholders involvement in intensified training.