Market System Strategies and the Financial Uptake among Women-Owned Micro, Small and Medium Enterprises in Informal Markets in Nyeri County, Kenya.
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Date
2024-05
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Abstract
Access to financial resources is crucial for business success, whether from external sources like loans and investors or internal sources like profits. These resources are essential for funding growth, managing operations, investing in innovation, and overcoming challenges. Adequate financial resources creates opportunities for growth and thriving in the market. Working capital is also crucial for smooth operations. However, female entrepreneurs in underserved markets face barriers due to limited access to formal financial institutions, making it difficult for them to secure loans or credit and hindering their business growth. A study conducted on women owned MSMEs in Nyeri County found that market system strategies significantly influence the financial capabilities of businesses. The study aimed to understand how market strategies affect MSMEs, particularly owned by women in Nyeri County. The findings can benefit policymakers, financial institutions, and business owners seeking to improve MSMEs' financial capabilities and sustainability. The study incorporated three key determinants, drawing from Ricky Griffin's model, the Theory of Change, which elucidates the rationale and process behind anticipated changes based on causal analysis, and Refinancing theory, which allows for the adjustment and restructuring of financial terms to better suit borrowers. The study utilized a descriptive research design, specifically employing a cross-sectional approach. This approach allowed for a snapshot of the current state of the businesses being studied. A proportionate stratified sampling method was approximately 30% of the total population. This sampling method targeted an overall of 890 SMEs owned by women from the informal settles of Nyeri Country with 275 having carefully been selected to represent various sectors and sizes to ensure diverse and comprehensive perspective of the study. The study then employed structured questionnaires designed meticulously to assess accuracy. To ensure the reliability of the questionnaires, a pilot test was conducted involving 10 women business owners. This pilot test helped identify any potential issues or areas for improvement in the questionnaire. The reliability of the data collected was assessed using Cronbach 's alpha, with a threshold of 0.7 considered acceptable. Mean and standard deviation statistics were used to characterize the sample population and study parameters. These statistics provided a summary of the data collected, allowing for a better understanding of the sample population and the variables being studied. Regression analyses were then conducted to examine the relationship between numerous factors (market system strategies, business readiness, financial literacy, impact investment, and investor relationships) and the financial performance. The results of the regression analyses indicated that these factors had a positive and significant impact on financial performance, with p-values below the 0.05 alpha level. The analysis shows that the correlation between these variables and financial performance is not random. The research suggests that successful marketing systems strategies lead to financial performance. Based on the research findings, recommendations made to enhance financial adoption among women entrepreneurs included, enhancing business acumen and financial understanding through business readiness and financial literacy, establishing partnerships with impact investors to promote financial adoption and support business growth and community impact in Nyeri County. Furthermore, local, and national governments can promote policies and initiate incentives for impact investment particularly those led by women and creating a supportive ecosystem for their growth and development.
Description
A Research Project Submitted to the School of Business Economics, and Tourism, Economics, and Tourism in Partial Fulfilment of the Requirements for the Degree of Master’s in Business Administration (Strategic Management) of Kenyatta University, May 2024