Influence of Micro Finance Institution on Development of Small Scale Entrepreneurs: a Case of Bungoma South Sub County, Bungoma County, Kenya.

Abstract

Following several services and products offered by MFTs to entrepreneurs in several areas of the country, a study was conducted to investigate the influence of MFls on the development of small scale entrepreneurs in Bungoma County, South Sub County, Kenya. The study was guided by the following research objectives: to determine the extent to which micro finance institutions have influenced the employment of small scale entrepreneurs, to examine how micro finance institutions have influenced the poverty level of small scale entrepreneurs, to assess how micro finance institutions have influenced income distribution of small scale entrepreneurs and to determine the extent to which microfinance institutions have influenced the living standards of small scale entrepreneurs. The researcher used both primary and secondary data. The primary data was obtained from clients and the management of four MFls namely SMEP micro finance bank.Faulu DTM,KWFT microfinance bank and equity bank. A sample size of 302 was obtained from a total population of 1400. The information was obtained by use of documentation, self-administered questionnaires and interviews. Secondary data was obtained from published materials, which included journals, textbooks magazines, internal reports and newspapers. The findings of the study were analyzed to come up with conclusion from which the researcher drew recommendations. The findings of the study revealed that loans received from MFls have contributed positively to the four objectives. The research found out that after a period of loan cycle with MFls, there was an increase m mcome of the business which necessities more workforce due to increase in production. Employment of more people in business reduced poverty among communities hence improving the general living standards of people. The findings of the study are will help MFls management to gain an insight on how they have impacted the development of small scale entrepreneurs. The government too can use the findings to formulate policies that can promote growth of MFls and entrepreneurs hence leading to better performance ofMFls.