Bank Lending Requirements and Credit Accessibility by Small and Medium Enterprises in Central Business District, Nairobi City County, Kenya

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dc.contributor.advisorAmbrose Jagongoen_US
dc.contributor.authorKirop, Jepkemoi Jane
dc.date.accessioned2024-06-05T05:18:43Z
dc.date.available2024-06-05T05:18:43Z
dc.date.issued2023-11
dc.descriptionA Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment for the Award of Degree in Masters of Business Administration (Finance) of Kenyatta University November, 2023en_US
dc.description.abstractFor Kenyan SMESs, access t0 credit persists as an issuc, hindering growth and economic contribution. Due to their assessment of SME default risk, banks show caution when extending credit. On the basis of KNBS Economic Survey (2020), just 26.6% of SMEs have access to credit, while the remaining 73.4% rcly on alternatives such as selffunding, family support, or friendly assistance. The purpose of this study is to investigate whether bank lending standards affect the availability of credit for SMEs in Nairobi City County, Kenya. To investigate whether business owners' character affects small and medium enterprises' credit accessibility in Nairobi City County, Kenya. By Financial Intermediation Theory, Firm Characteristics theory, Pecking Order Theory, Human Capital theory, and Ex-ante theory, this study is guided. With a descriptive survey design, the study adopted. In Nairobi, the target market size includes a total of 10,767 small and medium-sized enterprises. Small and medium-sized enterprise (SME) owners numbering 386 formed the study sample. Through questionnaires, the study collected primary data. Using the drop-and-pick-later method, the researcher collected data. SPSS enabled analysis and coding capabilities according to the study's needs. Frequencies, mean, and standard deviation was organized into a table for descriptive statistics presentation. Also entailing correlation analysis and regression analysis, the study conducted inferential statistics. The findings revealed a statistically significant positive correlation (r = 0.741) and a significant relationship (p < 0.000). between character attributes and credit accessibility. The study also found that regression analyses indicated that business owners' character exhibits a positive and significant effect on credit accessibility (= 0.623; p<0.05). There is a strong positive correlation between loan agreement terms and credit accessibility, with a correlation coefficient of (r = 0.825; p < 0.00). The regression analysis shows that loan agreement terms has a positive and significant effect on credit accessibility for small and medium enterprises (SMEs) in Nairobi City County, Kenya's central business district (CBD) (B= 0.825; p<0.05). There is a strong positive correlation between business capital and credit accessibility, with a correlation coefficient of 0.721 and a significant relationship (p < 0.000). Business capital has a statistically significant positive effect on credit accessibility (B = 0.604; p < 0.05). There is a strong positive correlation between collateral and credit accessibility, with a correlation coefficient of 0.880 and a significant relationship (p < 0.000). Collateral has a statistically significant positive effect on credit accessibility (B = 0.797; p < 0.05). With a Pearson correlation coefficient (r = 0.858, p-value 0.00), there is a strong positive correlation between loan repayment capacity and credit accessibility. Regression analysis- shows that loan repayment capacity has a significant positive effect on credit accessibility (B = 0.859; p<0.05). The study concluded that character attributes, collateral, business capital, and loan repayment capacity are all significant factors that influence credit accessibility for SMEs. The study recommended that policy makers and practitioners should focus on initiatives that help SMEs improve these factors to increase their credit accessibility.en_US
dc.description.sponsorshipKenyatta Universityen_US
dc.identifier.urihttps://ir-library.ku.ac.ke/handle/123456789/28231
dc.language.isoenen_US
dc.publisherKenyatta Universityen_US
dc.subjectBank Lending Requirementsen_US
dc.subjectCredit Accessibilityen_US
dc.subjectSmall and Medium Enterprisesen_US
dc.subjectCentral Business Districten_US
dc.subjectNairobi City Countyen_US
dc.subjectKenyaen_US
dc.titleBank Lending Requirements and Credit Accessibility by Small and Medium Enterprises in Central Business District, Nairobi City County, Kenyaen_US
dc.typeThesisen_US
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