Influence of microfinance institutions on growth of small business enterprises in Kenya: a case of Webuye division, Bungoma county

Abstract

Many small business enterprises (SBEs) in Kenya borrow capital from the microfinance institutions to enhance the operation of their businesses. Some of the micro finances also provide training to the SBE. The aim of this study was to determine the influence of micro financing on growth of small business enterprises (SBES) in Kenya: case of small business enterprises in Webuye Division, Bungoma County. Specifically the objectives were: to determine the effect of access to credit, to establish the effect of entrepreneurial training, to assess the effect of savings and to determine the effect of regulatory framework of microfinance institutions on the growth of the SBEs in Webuye Division, Bungoma County. This study was conducted through descriptive survey research design. The target population was 4,213 consisting of registered and licensed SBEs financed by MFIs and credit and lending officers in Webuye Division. Sampling methods were used to select 351 small scale business enterprises and credit and lending officers to be used in the current study. Structured questionnaires and interview schedules were developed, pre-tested and used for collecting quantitative data for the study from the small scale business entrepreneurs. There were two kinds of data generated in this research. Quantitative data from credit accessed was analysed using the Statistical Package for Social Science (SPSS) software to compute frequencies and percentages. The qualitative data in this study was obtained from training. Such data was analyzed by descriptive statistics such as frequency distributions and percentage. The study showed that MFIs have played an important role in promoting the running of SBEs. More regulatory frameworks should be put in place to ensure the small scale entrepreneurs access credit to finance venture