Micro Finance Institutions Services and Performance of Restaurants in Mombasa County, Kenya
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Date
2023-06
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Abstract
The expansion of the economy depends on the availability of financial services,
notably credit and savings options. As a result, Kenya's economy has not grown and developed as expected as a result of MSMEs. Medium and Small entities encounter
several weaknesses that hinder their potential usefulness towards long-term
sustainability of the economy. The lack of credit services is one of these concerns.
The efforts of microfinance institutions to make their services available to small and
medium-sized businesses that have not profited from the traditional formal banking
system have been recognized as a result of the growth and expansion of SMEs.
Because of this, the researcher evaluates how microfinance scrvices affect the
performance of restaurants in Mombasa's core business district. Researchers hope to
learn how microfinance training affects the performance of Mombasa CBD
restaurants; how the regulatory framework for microfinance affects Mombasa CBD
restaurants; whether access to credit affects Mombasa CBD restaurant performance;
and the impact of microfinance credit cost on Mombasa CBD restaurant performance.
The study was based on Balance Scorecard theory, Resource-based theory, Pecking
order theory Credit Access theory and Management theory. A descriptive survey
design was used in this investigation for restaurants over seven years and above. 114
people who ~ worked at the selected restaurants in Mombasa's core business centre
were selected whereby, 57 of whom were managers and 57 were waiters. The study
used the descriptive survey approach, in which all employees were included. The
study data was through questionnaires. Statistical Package for Social Science (SPSS)
Version 25 for Windows was used for data analysis. In order to get the most accurate
results, the study involved use of variety of statistical methods such as means,
frequency tables, percentages, standard deviations correlation and regression.The
study found that training and microfinance regulatory framework indicated an
insignificant relationship with performance of restaurants in Mombasa County
however access to microfinance credit and microfinance credit cost indicated a
positive significant relationship with performance by SMEs in Mombasa County. The
study concluded that Owners of businesses can benefit from training in the form of
expanded professional networks, the transfer of technology, the formation of new
businesses, and the acquisition of superior management practices. Business success
and continued operation depend on the availability of debt financing. However, MFIs
are hesitant to lend to SMEs because they are seen as higher risks and SMEs typically
do not have collateral to back up their loans. The study also concludes that the amount
of the loan is a crucial factor in microfinance lending since it affects the overall cost
of financial intermediation. The study recommends that Microfinance institutions
should continue training restaurant owners on financial management for the purposes
of sustaining enterprises. This will create better understanding on how to manage their
funds more efficiently and-effectively. In order to make it easier MFIs to have
favorable financial performance, the institutions ought to adopt methods that will
make it easier for MFIs to have improved liquidity. This will allow the institutions to
be more efficient in their financial operations. The study also recommends that
microfinance institutions and policymakers should think about incorporating an
affordable micro-insurance plan as part of the microfinance package for all its clients
who seek for loans. Small and medium-sized enterprise management should be more
proactive in approaching MFIs to analyze their business progress and share their
current needs and concerns.
Description
A research Project submitted to the School of Business, Economics and Tourism in Partial Fulfilment for the Award of Degree in Master of business Administration (Entrepreneurship Option) of Kenyatta University
Supervisor
1.Nganga, Peter