| dc.description.abstract | The study sought to establish whether borrowed funds from MFIs are effectively applied
and used for the intended purposes. Despite a lot of effort in terms of resource
availability, the poverty levels are still very high and the defaulted loans in Maralal town
amounts Kshs. 15 million. There is a number of Microfinance Institutions within Maralal
town like the Kenya Women Finance Trust (KWFT), Jamii Bora Trust, Government of
Kenya Youth Enterprise Fund, Women Enterprise Fund and the Kenya Industrial Estates.
Despite this intervention, Samburu is still among the poorest districts in Kenya. The
study was based on the following objectives: To find out whether policies of
Microfinance institutions affects access to credit; To find out whether economic
characteristics of entrepreneurs affect applicability and usage of borrowed funds; To
examine whether literacy levels affect applicability and usage of borrowed funds; To find
out the relationship between capacity building initiatives and applicability and usage of
borrowed funds. Data collection was done using questionnaires. The data collected was
analyzed through both descriptive and inferential statistics (Spearman Rank Correlation).
The analyzed data is presented in form of tables. The study has established that income
levels, expenditure levels, poverty levels and access to credit are factors that determine
the use of borrowed funds from MFIs. The literacy levels of borrowers identified in the
study are: no formal education (77.7%), primary education (72.85%), secondary
education (78.9%), tertiary education (78.9%) and university education (78.9%). These
literacy levels are a determinant of credit access and use from the MFIs. Besides, the
literacy levels have a significant relationship of 0.01 level with use of borrowed funds.
The MFI policies that affect the use of borrowed funds are related to lending, interest
rates, credit recovery and MFI regulation. These policies are not friendly to credit access
and use. Capacity building initiatives that influence the use of borrowed funds have been
identified as entrepreneurial skills, innovativeness, and fund raising skills. The findings
of the study will be useful to the surveyed MFIs, the Government and other researchers
interested in this field. | en_US |
