Effect of Borrower’ Characteristics to Government Funded Micro-Credit Initiatives in Murang’a County, Kenya
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Date
2014
Authors
Mungai John Njangiru
Maingi, J.M.
Muathe, Stephen M. A.
Journal Title
Journal ISSN
Volume Title
Publisher
Globeedu Group
Abstract
The role of the government in providing start-up funds and their relationship to sustainability is crucial. The main focus of this
research was to analyze the loan repayment and sustainability issues of government micro-credit initiatives in Murang’a County.
The specific objective of the study was to establish the effect of borrower characteristics to micro-credit repayment in Murang’a
County. The study adopted a positivism philosophy of research, where the researcher was independent on what was being
observed and what was studied. Descriptive survey design was used to determine the level of government funded micro-credit
loan repayment and its effect on sustainability for other borrowers. The target population was 1520 social and economic groups
in Murang’a County. Clustering and Simple Random Sampling techniques were applied to select a sample size of 307 groups
including a census of 16 constituency credit officers, who were interviewed. This, in total accounted to 19.5% of the total
population. A questionnaire and an interview schedule were used to collect data. Descriptive data were analysed using tables
and charts. Qualitative data were analysed using Chi-square, Analysis of Variance and Logit Regression Model. Hypothesis
testing revealed statistically significant results, for borrowers’ characteristics effect to loan repayment and sustainability. The
study found that due to problems of high risk and high cost of borrowing, uncertainity of repayment capcity on the rural
borrower has been reported high due to irregular income streams. Systems should be developed to ensure consistent incomes and
expenditure to reduce/remove uncertainty. The study found some spouses who had run away from homes after receiving loans, to
evade repayment or to evade the nugging demands from their partners or to part with some/all the amount borrowed. This may
be one of the explanations of wife/husband buttering in Cental Kenya reported by the local media
Description
Research paper
Keywords
Sustainability, Rural credit, Poverty, Micro-credit, Default, Collateral
Citation
International Journal of Innovative Research and Development, Vol 3 Issue 11 2014