Credit Accessibility and Success of Women-Owned Enterprises in Kitui County, Kenya
Kitivui, John Kimanzi
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Women-owned enterprises have been recognized as an important driver of innovation, employment, productivity, and economic growth. Women owned-enterprises in Kitui County have not performed well over the years. This is attributed to numerous barriers to women-owned enterprises including access to credit, networks, training, and information as well as policy and legal constraints. The purpose of the study was to investigate the relationship between access to credit and success of women-owned enterprises in Kitui County, Kenya. Specifically, it examined the relationship between interest rates; education and entrepreneur training; lending procedures; collateral requirements, and the success of women-owned enterprises in Kitui County. The study was anchored on the social capital theory; resource-based view theory; pecking order theory; and entrepreneurship theory of Shane. A descriptive research design was adopted. The targeted population was 1,046 women who own enterprises in Kitui County and are members of various groups registered by Kitui County Government. The sample size of 91 was derived using Slovin’s formulae. A structured questionnaire was used to collect data. The descriptive statistics like frequency distribution, percentages, and other descriptive statistics such as mean and standard deviation were used to analyze the data. Besides, inferential statistics including correlation and regression analysis were used to determine the relationship between the variables. The Statistical Package for Social Sciences version 20 was used to analyze and tabulate the collected data. Data presentation was done using frequency tables, pie charts, and bar graphs. Besides, multiple regression and regression analysis was used to determine the relationship between dependent and independent variables. The presentation of the data was done using frequency tables, pie charts, and bar graphs. The findings revealed that there is a significant negative correlation between the interest rate and the success of women-owned enterprises; a positive and significant correlation between education and entrepreneurial training and the success of women enterprises; a significant negative correlation between lending procedures and the success of women-owned enterprises; and an insignificant positive correlation between collateral requirements and the success of women-owned enterprises. Therefore, the study concludes that high interest rates are a hindrance to the success of women-owned enterprises; that education and entrepreneurial training are crucial to run an enterprise successfully; that cumbersome lending procedure discourages women from seeking credit from financial institutions thus hindering their success; and that although collateral requirements adversely affect access to credit, it does not necessarily affect the success of women-owned enterprises. Consequently, the study recommends that that government policymaker, both at Kitui County Government and national governments should come up with a women fund that can help women entrepreneurs to access credit at a relatively low-interest rate, while financial institutions should establish specific products for women entrepreneurs. The study further recommended that the policymakers should regularly organize entrepreneurial training for women to empower them with skills and knowledge that can help them manage their enterprises effectively; that financial institutions and commercial banks come up with procedures and processes that allow entrepreneurs to access credit within the shortest time possible as long as they qualify and that financial institutions focus more on the ability to pay instead of collateral.