Microfinance services and financial performance of small and medium enterprises of youth SMEs in Kisumu County, Kenya
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Date
2018
Authors
Omondi, Ruth I. A.
Jagongo, Ambrose
Journal Title
Journal ISSN
Volume Title
Publisher
International Academic Journals
Abstract
Small and Medium Enterprises (SMEs) is
an important sub sector for the Kenyan
economy like many other developing
countries since it employs about 85% of
the Kenyan workforce (about 7.5million
Kenyans of the current total
employment). The current constitutional
framework and the new Micro and Small
Enterprise Act 2012 provide a new
window of opportunity through which the
evolution of SMEs can be realized
through the devolution framework.
However, the impact of devolution on
SMEs development depends on the
architecture of the regulatory and
institutional framework inclined to
support SMEs in an economy. Lack of
access to credit is a major constraint
inhibiting the growth of SMEs sector.
The issues and problems limiting SMEs
acquisition of financial services include
lack of tangible security coupled with
inappropriate legal and regulatory
framework that does not recognize
innovative strategies for lending to
SMEs. The study sought to establish the
influence of microfinance services on the
financial performance of SMEs in
Kisumu County, Kenya. The specific
objectives were to determine the effect of
access to credit, savings mobilization,
financial skills training and role modeling
on performance of SMEs in Kisumu
county.The study was anchored on the
following five theories which include
women empowerment theory, game
theory of microfinance, uniting theory of
microfinance, financial sustainability
theory and poverty alleviation theory.
Empirical literature reviewed scholarly
studies on access to credit, savings
mobilization, financial skills training and
role modeling and their influence on
financial performance of SMEs. The
study used a descriptive research design.
The population of study were the youth
owned enterprises in the 7 sub-counties
in Kisumu County that were operational.
This consisted of 448 respondents who
were the proprietors of the enterprises. A
sample of 135 respondents was taken
which formed 30% of the target
population. The primary data was
collected by use of self-administered
semi-structured questionnaire. Data
analysis was done by use of descriptive
statistics such as frequencies,
percentages, mean scores and standard
deviation with the aid of SPSS and
presented through tables, charts, graphs,
frequencies and percentages.
Description
Research article
Keywords
Microfinance services, Financial performance, Small and medium enterprises, Youth, SMEs, Kisumu County, Kenya
Citation
Omondi, R. I. A. & Jagongo, A. (2018). Microfinance services and financial performance of small and medium enterprises of youth SMEs in Kisumu County, Kenya. International Academic Journal of Economics and Finance, 3(1), 24-43