Factors influencing Women's small scale businesses in accessing microfinance loan: a case of Machakos open market, Kenya

Abstract

The main aim of this study was to investigate the factors influencing women’s small scale businesses in accessing microfinance loans in Machakos market. The objectives of this study were : to examine how collateral influences women’s small scale businesses in accessing microfinance loans in Machakos market, to assess how socio-cultural factors influences women’s small scale businesses in accessing microfinance loans, to investigate how women’s attitude influences women’s small-scale businesses in accessing microfinance loans and to establish how interest rates influences women’s small scale businesses in accessing microfinance loans in Machakos market. Descriptive survey research design was adopted for the study. The researcher targeted a population of 380women respondents and 9 loans officers from microfinance institutions. Stratified Sampling was used to select 114 women respondents and 3 loans officers which is 30% of 380 and 9 respectively. Descriptive statistics was used to analyze data by use of frequencies, mean, standard deviation and percentages. Statistical Package for Social Sciences (SPSS) was used as a tool to aid the analysis. The study found out that most of women entrepreneurs in the Machakos market are of youthful ages of between 26-35 years which is the most productive and energetic age group. This is the age bracket when most of the women entrepreneurs started their businesses. Another finding is the accessing of credit particularly for starting an enterprise, as one of the major constraints affecting women entrepreneurs. Provision of soft loans is the major factor that hinders the women entrepreneurs in running the businesses effectively or illiteracy on how to access this financial aid. Also lack of tangible security is another major blow to the women entrepreneurs in order to have access to any financial aid by the financial institutions who also charge high interest rates hence repayment and running the business at the same time becomes hard. The study recommends that the financial institutions set some simple ways of accessing the financial facilities for the women small scale businesses and give them at reasonable rate to enable them to repay with ease. The body of women small scale businesses should carry out major seminars to educate the women on the major issues in running a business to success and also advise them when it is necessary to take loan facility and how to go about. The government to set policies that encourage women entrepreneurial initiatives and encourage them to own property especially land.