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Title: Role of micro-finance institutions in the growth of small scale enterprises: k
Other Titles: a case study of Eldoret Town
Authors: Chelagat, Grace Jepkorir
Keywords: Micro-finance institutions in the gr
Small scale enterprises
Issue Date: Oct-2010
Publisher: Kampala International University, School of Economics and management
Abstract: The study assessed the role of Micro Finance Institutions (MFis) n the growth and development of Small-Scale Enterprises (SSEs) in Eldoret Town. It sought to exp10re the contributions that micro-finance institutions have made to assist in the growth of small-scale enterprises and the barriers to effective micro financing. The study also investigated the impact of MFI credit on SSEs growth using three indicators; number of employees, monthly sales, and total value of assets. Eldoret town has about 8000 SSEs. All the SSEs operating in Eldoret town that received some form of credit from MFis comprised the research population in this study. A questionnaire of both closed-ended and open-ended questions was used to collect data Data were analyzed using both descriptive and inferential statistics. The study employed a case study design of Eldoret Municipality MFis, it targeted a population of respondents comprising of trading, service and manufacturing SSEs which were chosen by simple random sampling. Data were collected using questionnaires. Descriptive techniques were used to analyze the data and correlation analysis was used to test the hypothesis. MFI credit plays a significant role in improving the performance of the SSEs and in fostering positive change like business expansion, opening of new branches and introduction of new products, services and acquisition of new assets. Correlation test results revealed that credit acquisition led to a significant increase in number of employees, monthly sales, and total value of assets, which are used as indicators of SSEs growth. The results however noted that high interest rates and some preconditions to credit acquisition like group formation and collateral requirement limited access to credit and affected the process of credit repayment.It was concluded that MFis play a significant role in the growth and development of SSEs through employment creation and poverty reduction. It was recommended that in order to create more positive impact in the development and growth of SSEs, the MFis should remove or flex some of the marginalizing preconditions, reduce their interest rates, and intensify their auxiliary services like continuous training and supervision. The study is expected to benefit MFis, SSEs, Government, Municipal council and scholars.
Description: A research report presented to the school of postgraduate studies in partial fulfillment of the requirement of the Degree of Master of Business administration of Kampala International University
Appears in Collections:Master of Business Administration - Main and Ishaka Campus

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