Factors Influencing Women Small Scale Traders Access To Microcredit From Microfinance Institutions: A Case Of Women In City Park Hawkers Market, Nairobi County, Kenya

Abstract

The study sought to investigate factors influencing access of microcredit from microfinance institutions among women small scale traders. The study further sought to establish the extent to which perception, cultural orientation, cost of credit and collateral influences access to microcredit from microfinance institutions by women small scale traders at City Park Hawkers market in Nairobi City County. Despite the government effort to realize the 3 rd millennium development goal of ensuring gender equality and women empowerment through various funds like Women Enterprise Fund as one of the flagship project under the social pillar of Vision 2030, women are still disadvantaged when it comes to accessing of microcredit. The literature review covered the emergence of microfinance in Kenya, explaining which institutions have contributed a critical role in boosting microfinance as an industry in Kenya. The research design that used in this study was descriptive survey method in which questionnaire was utilized to collect data from a sample of women small scale traders under the study. The target population of this study was 368 women small scale traders operating at the City Park Hawkers market in Nairobi and licensed by the Nairobi City County as at June 2015. A study sample of 192 women small scale traders drawn from the stalls in the market was selected for the study using the systematic random sampling. Validity of the instruments was tested by applying content validity to ensure the instruments represents what they were designed to measure. The collected data was analyzed using descriptive statistics that constituted of frequencies and percentages. The study may be useful to the government through the Ministries of National Treasury in their planning and policy development targeting engendering women through microfinance. It will also provide an opportunity to the MFI to revise their product features to attract the significant number of women small scale traders not accessing microcredit and hence ensure that the informal sector is supported in ways that will raise productivity and distribution,increase jobs,improve household incomes and public revenues and thus present essential reforms necessary to accelerate economic growth. The study found out that accessing of credit particularly for starting an enterprise is one of the major constraints affecting women small scale traders. Provision of soft loans is the major factor that hinders the women entrepreneurs in running the businesses effectively. Also lack of tangible collateral security is another major constraint to the women entrepreneurs in order to have access to any financial aid from the financial institutions who also charge high interest rates hence repayment and running the business successfully at the same time becomes difficult. The study recommends that the microfinance institutions should set some simple process and requirements of accessing the microcredit by the women small scale businesses and give them at reasonable interest rate to enable them to repay with ease.