Influence of micro-finance services on the growth of small enterprises in Kiminini division, Trans-Nzoia county, Kenya

Abstract

This study investigated the influence of micro-finance services on the growth of small enterprises in Kiminini Division, Trans-Nzoia County, Kenya. It was guided by the following objectives: Determine the influence of loans disbursement on initiation of small enterprises; Assess the influence of training on the growth of small enterprises; Establish the influence of micro-finance insurance services on growth of small enterprises;and establish whether saving influence the growth of small enterprises.The number of micro-finance institutions in Kenya continues to grow rapidly .However,their wide presence does not correspond with the extend of growth of small enterprises in Kiminini division,Trans-nzioa county Kenya .Furthermore, the analysis of the profile of small enterprises showed that most small enterprises were at their micro-stages, since they employed less than five people and the sector was hugely dominated by commerce sub-sector. The study was carried out in Kiminini Division Trans-Nzoia County and was guided by a conceptual framework developed by the researcher. It also utilized a descriptive survey design. It targeted 2441 small scale enterprises in Kiminini division, the sample size was 344 but only 321 were able to return their questionnaires which were used in the analysis of data. The study mainly utilized the questionnaire and interview schedule to gather information from small enterprises sector and micro-finance institutions. Data collected from the questionnaire was analyzed using the statistical package for social scientists (SPSS) version 17 and then summarized and interpreted. The analysis was presented in tables of frequencies and percentages. The study established that majority of the SSE’s could not afford the collaterals in order to secure loans which was a possible explanation for the low numbers of SSEs sourcing their capital from the micro-finance institutions. It also established that the repayment procedures and rules influenced the accessibility of micro finance institution loans for project development. Majority of SSE’s had not attended micro finance institution trainings related to their businesses growth. It was also established that some of the SSE’s had no time for trainings undertaken by the micro finance institutions due to their busy schedule. The study further established that savings aided the SSE’s in getting loans for their business from micro finance institutions which assisted the SSE’s in stocking their businesses. Lastly, the study established that most SSE’s do not have any micro finance institutions insurance. The study recommends that the there need for a policy that all people engaged in SSE’s must undergo some business oriented training before they are issued with a business license. This will assist the SSE owners to possess a little of technical/ entrepreneurial knowledge on enterprise initiation and growth.