Credit Access and Performance of Micro and Small Enterprises in Nakuru County, Kenya
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Date
2020
Authors
Silas, Peter Mwiathi
Mwangi, Rahab Wanjiru
Journal Title
Journal ISSN
Volume Title
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Abstract
Ent repreneurship cont ributes to the achievement o f development goals
by encouraging economic growth and improving the standards of l iving of the
people. The Government o f Kenya has established various funds in an effort to
enhance equity among socially disadvantaged groups like women , the disabled and
unemployed youth. Despite these efforts, the uptake of these funds remains low due
to unfavourable lending conditions, leaving a financing gap. This study employed a
non-experimental research design, conducted in four randomly selected
administrative sub-counties in Nakuru County. From an approximated sampl ing
frame o f 650 MSEs, a random sample o f 248 was selected. A st ructured
questionnai re, with a Cronbach Alpha coefficient of 0 .72, was administered to the
sample. Results o f a l inearized logarithmic regression showed that credit amount
and challenges faced in accessing credit accounted for close to 14.0% (R2 = 0.139)
of per formance o f the MSEs in Nakuru County. The study concluded that credit
access had a positive signi ficant effect on the performance o f MSEs. Policy
impl ication was that the Cent ral bank, in collaboration with commercial banks,
should ease borrowi ng t erms t o i ncrease MSEs‟ access t o credit . A l so, t he
government should offer incentives to lending inst itut ions so that they can lower the
cost of borrowing.
Description
Research Article
Keywords
Credit Access, Performance o f MSEs, Credit availability to MSEs, Small Business Financing
Citation
Silas Peter Mwiathi and Mwangi, Rahab Wanj iru(2020);Credit Access and Performance of Micro and Small Enterprises in Nakuru County, Kenya . IAR J Bus Mng, 1(3), 163-170.