Contribution of Saccos’ to the Growth of Entrepreneurship in Kenya: a Case of Mwalimu National Sacco

Abstract

Entrepreneurship is emerging as a major contributor to enhanced economic development for any nation world over. It has assumed the importance for accelerating economic growth both in developed and developing countries by promoting capital formation and creating wealth in the countries. In the study, the researcher’s aim was establish the contributions Mwalimu Sacco which provides business loans to those aspiring to grow businesses has helped grow entrepreneurship in Kenya. Previous studies have proved that availability of credit alone is not automatic that the businesses will prosper. Entrepreneurship has helped many economies make great strides in their development agendas. For entrepreneurs to effectively contribute to growth of a nations economy, there must be in place favourable policies enacted by governments to promote its growth. Resources have always stood out as a challenge for many entrepreneurs in Kenya. Saccos have filled this gap by being able to provide affordable credit services to members willing to venture into business. Mwalimu national Sacco provided the best case study being one of the largest saccos in Kenya with a department specializing in provision of loans specifically to support members willing to venture in businesses. It was found out that a majority of the members who had accessed this credit product failed to utilize it well for lack of training on the best investment opportunities for lack of business management skills. Apart from availing credit, there is need for further support in terms of providing non-financial services to borrowers. In the study, it was established that training is one of the major requirements entrepreneurs need to undertake so that they become adequately prepared to effectively face emerging challenges in business ventures. It was observed that quite a number of those loaned without going through basic business training were defaulting on their loan contracts with the Sacco and their businesses were running at a loss. Also majority of those who participated in the study were not aware of the fact that Sacco’s, apart from offering credit should also provide basic training on financial management issues to members. The study adopted both qualitative and quantitative techniques to obtain date. The quantitative data was then analyzed using SPSS software to obtain graphs, Frequency distribution tables, Anova Table, Regression Analysis which were then interpreted. Conclusions were obtained, and recommendations provided for further actions to be taken by relevant stakeholders.