Effects of Micro-Finance Products on Financial Performance of Women and Youth Owned Enterprises in Trans Nzoia County, Kenya
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Date
2023
Authors
Koima, Joseph
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Women and youth are marginalized group based on the access to finance, knowledge
among other limiting factors. Micro-finance institution is remedy to the existing problem.
The population's widespread inability to access resources of production, particularly
financing, is a problem impeding the achievement of development goals in less
developed nations. This inhibits people's entrepreneurial capacity, particularly the
impoverished. Microcredit is one approach that has been used to solve this issue. In
Kenya, the success rate of new SMEs is 40%, which means that 60% of new SMEs fail
during their first phases. Such a high proportion indicates that there is a considerable
likelihood of a problem inside the Kenyan corporate environment. Access to finance, as
well as the cost of borrowing, is one of the most significant difficulties that SMEs
confront. The study aimed to determine the outcome of micro-finance products on
operation of women and youth owned enterprises in Trans-Nzoia County. Specifically,
the investigation aimed to realize the following aims; to determine the influence of
micro-credit; to establish the effect financial training; to inspect the influence on microsavings and to establish the micro-insurance on financial performance of women and
youth owned enterprises in Trans-Nzoia County. The study will be anchored on three
theories provided linkage on the financial, training and saving service to the women and
youth businesses performance. The notions that underpin the investigation include;
Agency Theory, Capitalism Theory, Uniting Information Asymmetry Theory and Theory
of Micro-finance. The investigation employed a descriptive research strategy. The target
population was therefore a total of 1513 registered women and youth owned enterprises
operating within 5 Sub-Counties in Trans-Nzoia County. From 1513 women and youth
owned enterprises who borrow from micro-finance in the county. A sample of 94 of
respondents were designated to be part of the investigation which was selected using
stratified sampling technique. Validity and reliability of the instruments were achieved.
Data was assessed using the SPSS. The researcher used both descriptive and inferential
statistics to analyze quantitative facts, which included means, standard deviations, and
regression analysis. Data was presented using tables and graphs. Findings revealed youth
business enterprise grow through micro-credit despite delays, high interest and use of
inventory based collateral. Short term loan was better as compared with medium and
long-term. Financial training assisted the business in enhancing management skills,
investment and proper utilize of loans. The micro financial institution used records for
monitoring purpose and training. However, training program were offered by few micro
financial institutions which assisted in increasing business skills as well as sales. Microsaving was provided by slightly few micro-credit finance. Minimum saving were
affordable in nature as well as with interest to encourage women and youth businesses to
save. However, there was a need to differentiate the saving products more for different
business needs. Finally, micro-insurance was found to be offered by few micro-financial
institutions. Micro-insurance product had affordable premium and claims were processed
on time within stipulated period. This assisted business to continue with core task with
minimum risk. The study concluded that micro-credit, financial training, micro-saving
and micro-insurance products had positive significant impact on performance of women
and youth business. Therefore, recommended that micro-financial institution should
improve training programs, differentiate micro-saving and micro-insurance products as
well as consider short term loan with low interest for the business.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfillment of the Requirements for the Award of the Degree of Master of Business Administration (Finance Option) of Kenya University, April 2023.
Keywords
Micro-Finance Products, Financial Performance of Women and Youth Owned Enterprises, Trans Nzoia County, Kenya