Microfinance Facilities and Financial Performance of Small and Medium Enterprises in Juja Sub-County,Kenya
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Various studies have been carried out in Kenya on small and medium enterprises and the manner in which they are influenced by microfinance facilities but none had majored on the impacts of microfinance offices on the monetary performance of the SMEs. Microfinance establishments have likewise confronted challenges in managing an enormous number of little and medium undertakings, whose credit needs are little and successive and their capacity to offer insurances is restricted. This prompted investigation and improvement of elective credit conveyance bundle model that would satisfy the necessities of the little and medium undertakings. It is in this context that microfinance facilities emerged to give the microfinance institutions not only a competitive edge over their competitors, but also improve the performance of their clients.This study sought to find out the influence of microfinance facilities such as micro loans, savings, training and micro-insurance on the financial performance of small and medium enterprises.For financial performance measurement, the researcher used key performance indicator, net profit margin. The study adopted a descriptive research design. The targeted population entailed 348 small and medium businesses and stratified random sampling with 6 strata was used. To calculate the sample size of the respondents, the study used the Krejcie and Morgan formulato obtain a sample size of 73. The studyused mixed questionnaires,using Likert type scale and administered by 4 trained research assistants. The researcherselected a pilot group of 7 small and medium enterprises from Juja Sub-County to test thequestionnaires, which werenot included in the main study. Using statistical package for social scientists, data analysis was done quantitatively and qualitatively by use of descriptive statistics and inferential statistics. The association between microfinance facilities (independent variables) and financial (dependent variables) were arrived atby use of multiple regression analysis at a 95% confidence level. The study concluded that the financial structures are very small and have had a positive impact on the financial performance of small and medium enterprises in Juja Sub-County. It is concluded that small and medium enterprises in Juja Sub-County were aware of existing microloans bymicrofinance institutions, the loans were affordable, had flexible terms and conditions and have enabled them grow significantly. The study concluded that to a significant extent thesmall and medium enterprises were aware and embraced savings facilitiesand schemes offered by themicrofinance institutionsbut their volume and frequency of saving was below average. The study recommends that microfinance institutions in Juja Sub-County need to create more awareness, avail microfinance facilities and customize them to fit their needs. The study recommends thatsmall and medium enterprises need to build capacity in financial management and entrepreneurial skills, and enhance their saving culture to improve their creditworthiness and hence their growth.