The impact of microcredit on the growth of small and micro enterprises in Kitui district
Kyaka, Muthengi Dalmas
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Most entrepreneurs are involved in small scale and basic enterprises including manufacturing, wholesaling or retailing operations (smith et al, 2000). Small Scale businesses have varied credit needs, which include; working capital, machinery, infrastructure and so forth. Raising finance for these small-scale businesses can be one of the most challenging and frustrating tasks facing them. Whereas about 70% of small scale entrepreneurs are located in the rural areas, many credit programmes have not addressed their needs. Nevertheless, evidence suggests that exploitation of highly profitable opportunities by SMEs could be accelerated if they had greater access to external financing (Hughes & Storey, 1994). The purpose of this study was to assess the impact of micro finance credit on the growth of SMEs in Kitui district. The study took place in Kitui district and it employed descriptive research design. The target population was SMEs who had and had not benefited from micro credit. Simple random sampling was used to obtain appropriate sample out of the target population. This method ensured that all respondents had equal chances of being selected for the sample. Data for the study consisted of primary data collected by use of self administered questionnaire. Data was analyzed with the help of the statistical package for social sciences (SPSS). The analyzed data was presented inform of frequency tables and pie charts. The results of the study showed that about 80% of the sampled population had used credit before. The result also showed that micro credit had impacted positively on the growth of SMEs in the district. According to the findings of the study, it was recommended that the government should improve the existing facilities and establish those which are lacking in order to better the working atmosphere and hence performance of the SMEs operating in the district.