Barriers faced by MSE entrepreneurs in accessing credit/ loans

Abstract

This study focused on barriers faced by MSE entrepreneurs in accessing finance from both formal and informal financial institutions. The study covers MSl': entrepreneurs within the Nairobi CI3I) and its environs, where a sample of 60 entrepreneurs was used to investigate what hinders them from accessing finance. Their perception, attitude, social demographic factors, types of business and views on financial institution were investigated. The data were both quantitative and qualitative and were analysed using both descriptive and inferential statistics. The findings revealed that MSE entrepreneurs do not access finance because of high costs by way of interest rates. and transactional costs incurred in the process of accessing credit. Bureaucracy in the form of stringent terms and conditions set by financial institutions arc also a deterrent. The study recommends that the government and financial institutions should develop products that suit the financial needs of MSE entrepreneurs in Kenya.