Influence of micro-credit on poverty alleviation among urban dwellers, A case of Nabongo sub-location, Mumias Town

Abstract

The study was designed to establish the influence of micro credit on poverty alleviation am~ urban dwellers in Nabongo Sub-location, Mumias Municipality, Kakamega County. The study aimed at finding out the influence of micro credit on poverty alleviation among urban dwelles, The study was based on income, basic needs, and consumption expenditure and asset acquisitiea Also investigated was the reason why there was increased poverty among the inhabitants ., Mumias town despite the presence of mainstream banking institutions like Barclays Bank, KellJll Commercial Bank, Co-operative Bank and Equity Bank; which were hoped to provide finances to all the members of the nation. The study adopted a descriptive survey design as a majlr method of research, while data was collected by the researcher from members of a populatiea under study. Stratified sampling technique was used to single out the micro credit institutioa Other methods included simple random and purposive sampling techniques.

Data was colleckll by use of questionnaires, interview guide and observation. It was then analyzed by use ., descriptive statistics constituting frequencies and percentages. The result of the study indicatai how urban dwellers have been unable to access credit from mainstream microcredit institutices present in Mumias town due to poverty and collateral requirements thus failing to deter the h~ level of poverty. The introduction of micro credit in the banking institution like Equity Ball which had a variety of loaning services to the small scale businesses and micro finaJ8 institution like K-rep, KWFT, SMEP and KADET motivated individuals to small businesses. order to improve their standards of living. Mumias being a very active town in terms ., economic activities due to the presence of Mumias Sugar Company in the district the inhabitass were hoped to live better lives above poverty line; yet observation revealed that a h~ percentage seemed to be surviving under poverty line.

The study revealed that most respondess were unable to meet their basic needs due to poverty. The result of the study revealed that mOlt respondents had low income per capita. The result of the study further revealed that microcreii influenced consumption expenditure among urban dwellers. The study recommends thIl microcredit institutions should open more branches to bring services closer to customes, borrowing scheme should be friendly and Monitoring and Evaluation should be done to ensWl clients use the money borrowed well.