The effect of mfi credit on assets of smes; a survey of small medium enterprises in nakuru town

SMEs sector is the source of income for more than 8 million people who represent the majority of working Kenyans. Despite their large contribution in development and economic performance they are mainly inhibited by access of finance. Large commercial institutions have failed to serve the SMEs in both urban and rural communities. They perceive them as lacking the ability to provide the quality services and are unable to satisfy more critical projects. Three out of five SMEs fail within first few months of operations because of negative perception towards SMEs. Given the importance of small businesses to the Kenyan economy and the exposure to risks owing to their size, there was need to conduct an empirical enquiry to investigate the effect of MFI Credit on Assets SMEs in Nakuru Town. The study used both quantitative and qualitative data. Primary data was collected through observation and structured questionnaires. The population was 700 SMEs in Nakuru Municipality. Out of this a sample 248 SMEs was selected on basis of Krejcie method of determining sample size. These were categorised into two the SMEs that receive credit from MFI and those that do not. Frequency tables and graphs were used to display the results and the relationships between the variables on enterprise performance were measured using correlation techniques. The variables used in this study were assetsas a dependent and MFI credit as independent variable. The study found out that there is a strong positive correlation between MFI credit and assets.

Michael Kuria Mbogo and Dr. Willy Muturi
Volume No: 
Issue No: 
Paper Number: 
Select Subjects: 
Select Issue: 
Download PDF: