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International Journal of Academic Research in Business and Social Sciences

Open Access Journal

ISSN: 2222-6990

Effects of Microfinancing on Performance of Entrepreneurship: A Study of Selected Counties in Western Kenya

Martin W.O. Madara, Maria Adhiambo Onyango, Michael Otieno Nyagol

http://dx.doi.org/10.6007/IJARBSS/v10-i7/7417

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Micro and Small Enterprises (MSEs) play a key role in economic development of the informal sector of many nations. Vast literature on MSEs growth cites financial challenges for startups and working capital. To address this gap, Many Microfinance Institutions have targeted Micro-Entrepreneurs with credit, savings products however; limited studies have addressed the extent in which such initiatives have stimulated the entrepreneurial spirit of individuals targeted. Kisumu, Siaya and Vihiga counties of Western Kenya which were targeted in this study lie in the same economic belt and share similar business culture. The Micro Financing Services explored in the study included Microcredit and Savings Mobilization. The study targeted 65,698 MSEs out of which a sample of 398 was selected. The study purposed to examine the effects of Micro financing services on the performance of MSEs. The study employed descriptive survey design and used structured questionnaires to collect primary data. Data was analyzed using statistical software (SPSS) and presented in descriptive and inferential statistics. The study found that access to microcredit and savings mobilization as independent variables significantly explains the variance in MSE Performance. The study conclusion is that micro-financing contribute to MSEs growth and expansion. The study recommends Public-Private–Partnership whereby Government provides guarantee funds to financial institutions who advance loans to MSEs, as well Government to provide tax incentives to financial institutions that specializes in financing the MSEs sector in Kenya. An in-depth study could be conducted to find out if, financing of MSEs contribute to increase in employment.

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In-Text Citation: (Madara et al., 2020)
To Cite this Article: Madara, M. W. O., Onyango, M. A., & Nyagoi, M. O. (2020). Effects of Microfinancing on Performance of Entrepreneurship: A Study of Selected Counties in Western Kenya. International Journal of Academic Research in Business and Social Sciences, 10(7), 296–318.