The Relationship Between Micro Finance Loans and Household Welfare in Bungoma County-kenya

Abstract

This study was carried out to establish the relationship of microfinance loans on household welfare in Bungoma County, Kenya. The study also aimed at determining the relationship that exists between household welfare and utilization of microfinance loans in Bungoma County. The researcher adopted a survey research design in this study. Stratified sampling was applied to pick the sample size from eight urban settlements in Bungoma County. Judgmental sampling was then applied in picking the respondents. Data was collected through questionnaires from 62 respondents. The same was analysed using frequencies and percentages. A regression analysis was also conducted. The findings indicate that utilization of microfinance loans results to improved education standards, improved healthcare, improved sanitation, enhance consumption and living standards, earning of extra income as well as reduction of unemployment by providing an avenue for self-employment. There also exists a very strong relationship between household welfare on one hand and microfinance loans. The study recommended that it will be prudent for the government to ensure that the microfinance loans are more affordable and accessible to rural households. This will enable many households to get access to the loans. Rural households who fear utilizing microfinance loans should also be adequately trained on the best ways to do so. This will encourage many households to seek microfinance loans and thus enhance their incomes