Influence Of Microfinance Financial Strategies On Growth Of Small And Micro Enterprises In Homa Bay County, Kenya

摘要

Extensive body of research has acknowledged Microfinance Institutions? positive influence on Small and Micro enterprises? (SMEs) growth. However the subject of relationship between MFIs financial strategies on SMEs growth in Homa Bay County has not been explored. This study, therefore examined the role of financial strategies employed by MFIs and their inputs on SMEs growth in Homa Bay County. Specifically, the study explores the effects of interest rate, loan repayment period, credit allocation efficiency, and managerial training strategies on growth of SMEs in Homa Bay County. The study adopted a descriptive survey design. Data were collected using questionnaires from 100 SMEs who were either owners or managers of those enterprises. These SMEs were selected from a target population of 1000 using stratified random sampling. Data were analysed using descriptive and inferential statistics, The findings indicate that managerial training, credit allocation and loan repayment strategies have a positive effect on growth of SMEs while interest rate strategy has a negative effect on cost of borrowing. The study recommended that a 24 hour credit allocation on a cellular platform should be provided to enhance credit access; micro finance institutions should be given incentives to attract others to join the sector; managerial training should include value chain addition and sectorial approach training; and tailored loan repayment should be encouraged to meet diverse needs of SMEs.