| dc.description.abstract | Micro and Small Enterprises (MSEs) play an important role in economic development within the informal sector. However the growths of MSEs appear to have a number of challenges mainly related to financial capital for startups, growth and survival. Microfinance Institutions have attempted to fill this gap however; limited studies have addressed the extent which these funds have enhanced the performance of MSEs. The purpose of this study was to assess the effects of Microfinancing services on performance of MSEs in Kenya. The study was guided by the following objectives: assess the role of Microcredit as startup capital on Performance of MSEs· establish the effects of Microcredit on performance of MSEs; assess the effects of Savings on Performance of MSEs; determine the effects of non-financial services on performance of MSEs; determine the effects of Microfinance Services on performance of MSEs moderated by Entrepreneurs' personal attributes and to determine if joint effects of micro finance services are greater than individual effects on performance of MS Es. The study was anchored on Shane (2003) Theory of Entrepreneurship, supported by Sociological Theory of Entrepreneurship and Classic Microfinance Theory of Change. Empirical literature was reviewed consistent with the key themes of objectives. The study targeted 65,698 licensed MSEs from the three Counties of Kisumu, Siaya and Vihiga out of which a sample of 398
MSEs owners/managers was selected using Yamane (1967) model to determine the stratified sample. The study employed descriptive survey design to collect data using a structured questionnaire which was administered to the respondents to collect primary data. The validity was measured using expert judgment and Pearson product moment correlations, reliability of the instrument was measured using Cronbach’s alpha. Data was analyzed using descriptive and inferential techniques aided by SPSS software. Six hypotheses were tested using inferential statistics at 0.05 significant levels. Objective one assessed the extent to which Microfinancing contributes to the start-up capital of MSEs. The ANOV A results indicate that the microcredit as startup capital significantly explain the variance on performance of MSE since Fo= 7.348>F (1, 397) = 3.86; ao = .007< nc =. OS. Objective two, established the effects of Microcredit on performance of MSEs. The ANOVA results indicate that the access to microcredit significantly explain the variance on performance of MSE since Fo = 6.405> F (I,
390) = 3.86; no = .012< uc = .05. Objective three, established the effects of Savings on performance of MSEs. The ANOV A results indicate that Savings significantly explain the variance on performance of MSE since Fo = 18.148> F (I, 397) = 3.86; cm= 001< ac =.OS. Objective four, determined the effects of Non-financial services on performance of MSEs. The ANOV A results indicated that Non-financial services significantly explain the variance on Performance of MSE since Fo = 26.076> F (1, 397) = 3.86; no = .001< ac =. OS.Objective five determined mediation effects of Entrepreneur attributes on performance of MSEs. The results indicate that there is no evidence to support mediation effects of Entrepreneur attributes on performance of MSEs. Objective six determined if joint Microfinance services are greater than individual effects on performance of MSEs, the results indicate that joint effects is greater than
individual effects on performance of MSEs at joint effects (R' = .117) while individual effects
(R’ = .096). The study concluded that micro financing contributes to MSEs startup capital, as well, microcredit, savings and non-financial services enhance the growth and expansion of MSEs. The study. therefore recommends Public-Private-Partnership whereby Government provides guarantee funds to financial institutions who advance loans to MSEs, as well Government to provide tax incentives to financial institutions that specializes in financing the MSEs sector in Kenya. | en_US |