The Effects of the Kiambu Trade Development Joint Loan Board Loans on Micro and Small Enterprises Performance in Kiambu County

Abstract

Small and Micro Enterprises have an important part to play in the growth and development of the economy of Kiambu County and the Kenyan Economy in general. The growth and development of these enterprises is really explained by their plans for business expansion through financial base expansion which is as a result of access to micro credit loans. This study analyses the effects of the Kiambu Trade Development Trade Development Joint Loans Board Loans on Small and Micro Enterprises performance in Kiambu County. In the Paper, Performance is proxied by increases in Sales, Profits, Return on investments, Retained Earnings and Stock Levels. The Motivation of this area of study was due to the existing knowledge gap on the effects of the Kiambu Trade Development Joint Loan Board scheme in Kiambu County on SMEs. Primary and secondary qualitative and quantitative data was used and it was collected though structured questionnaires, to ascertain the contribution of Kiambu Trade Development Joint Loan Board Loans to SMEs performance. The use of Simple Random Sampling was employed to arrive at 223 SMEs that formed the sample size of the research. The Heckman Probit Model was used for the data analysis. The key finding of the study was that the loans advanced by the Kiambu Trade Development Joint Loan Board positively contributed to SMEs performance. The study recommends that the Kiambu County Government should uphold and increase the Trade Loan fund, expand the facility to the Sub-regions of the County while creating its awareness. Further areas of study were recommended key among them being carrying out studies on the affordability and sustainability of the Fund.