FINANCIAL SERVICE ACCESSIBILITY STRATEGIES FOR FARMERS‘ ECONOMIC EMPOWERMENT IN KENYA: A SURVEY OF SMALL-SCALE TEA FARMERS IN KISII COUNTY

Abstract

Economic empowerment is an important goal for any Government. Agriculture is the main source of food as well as income of Kenya‘s economy. Various interventions and policies for ease of access to financial service have been carried out by different state and non-state agencies to achieve intermediate goals of enhancing the level of financial service providers, physical proximity, creating favourable economic factors, and addressing cross-cutting social contributory factors such as engendering, financial literacy among others. Therefore, the study was set to investigate the financial service accessibility strategies for economic empowerment in Kenya based on a survey of small-scale tea farmers in Kisii County. It was guided by the Resource-Based View Theory and incorporated the following theories: Financial Inclusion Theory, Classical Theory of Interest Rate, Financial Deepening Theory and Imperfect Information Theory. The study adopted a descriptive research design. Simple random and stratified sampling techniques were used. A sample size of 398 of tea farmers (participants) was studied, which represented all registered KTDA farmers in Kisii County and their several coded and un-coded buying centres. Questionnaires were used to collect primary data and later analysed using SPSS version 20. Descriptive and inferential statistics were used to analysed data as well as establish the relationship between variables and draw conclusions. The key findings using principal component analysis extraction method showed that there was significant positive relationship between the level of financial providers, Physical proximity, economic factors, social factors, the moderating effect of demographic factors on the relationship between financial service accessibility strategies and economic empowerment and the joint influence of financial service accessibility on economic empowerment among small-scale tea farmers in Kisii County –Kenya. It was concluded that the level of access to financial service providers is a significant aspect in enhancing economic empowerment. There is inadequate infrastructure development in the rural areas which affect financial accessibility among tea farmers’ educational level determines tea farmers‘ financial accessibility and the effect of demographic factors. The study recommends that financial institutions should develop financial products that are tailor-made to the needs of tea farmers to increase financial inclusion among farmers and adopt reliable information technology which will enhance financial inclusivity among tea farmers. The national government, through the ministry of lands and the national land commission, should ensure that land ownership challenges are addressed so that those lands can be used for economic purposes which include using the title deeds for securing credit facilities from financial institutions to enhance their economic welfare. That through collaboration between KTDA and financial institutions, tea farmers should regularly organise workshops, training on financial literacy to create awareness on financial management and opportunities for their economic empowerment. Suggestions are proposed for further research in financial service access strategies that can economically empower farmers in Kisii County and the same to apply to other counties in Kenya and Africa as a whole; including political, cultural behaviour and climatic changes.