| dc.description.abstract | Financing has been identified as a key element for micro and small enterprises to thrive
in their drive to build productive capacity, to compete, create jobs and to contribute to
poverty alleviation in developing countries. Financial Inclusion consists of all initiatives
to make financing a realization for this group. Researchers have argued that lack of
financing is almost universally indicated as a key problem for micro and small
enterprises thus the need to study influence of financial inclusion on performance of
these enterprises. The purpose of the study was to find out the influence of financial
inclusion on performance of micro and small enterprises in Kericho County, Kenya. The
study was guided by the following specific objectives: to establish the influence of
financial access on performance of micro and small enterprises, to determine the
influence of financial transparency on performance of micro and small enterprises, to
examine the influence of financial credit product on performance of micro and small
enterprises and to assess financial literacy of micro and small entrepreneurs and how it
influences performance. The study adopted a cross sectional survey design from a
population of 7277 micro and small enterprises in Kericho County. Stratified and simple
random sampling was used to sample the 380 micro and small enterprises.
Questionnaires were used in the data collection phase of the study. Cronbach‟s alpha was
used to assess the degree of instrument reliability while factor analysis was used to check
validity of the variables. The data was analysed using both descriptive and inferential
statistics. Descriptive statistics included frequencies and percentages while inferential
statistics included correlation and regression analysis models with the aid of SPSS
version 25. The research findings indicated that there exists a statistically significant
positive causal relationship between financial access, financial transparency, financial
credit products and financial literacy and performance among micro and small
enterprises to credit in Kericho County. This was established from correlation results
between the two variables. Results showed a statistically significant positive relationship
between financial access and performance (r = 0.215, p < 0.05), financial transparency
and performance (r = 0.251, p < 0.05), financial credit products and performance
(r = 0.222, p < 0.05) and financial literacy and performance (r = 0.293, p < 0.05). This
implies that when financial access, financial transparency, financial literacy and financial
credit products increases, performance improves among micro and small enterprises in
Kericho County, Kenya. Further, interest rates capping significantly moderates the
influence of financial access, financial transparency, financial credit products, and
financial literacy on performance of micro and small enterprises in Kericho, Kenya. It
was concluded that repayment period for MSEs loan was not flexible even after top up or
second facility. Micro and small enterprises need guarantors to access financial credit
facilities and that they need guarantors to access financial credit facilities for a second or
top up facility. Further, collateral and guarantors were needed before credit was given to
micro and small enterprises, with financial institutions not having flexible repayment
period for loans. Financial institutions did not embrace financial literacy of the micro and
small enterprises. The study also concluded that the micro and small enterprises were not
provided forums to be educated and informed on any new and changing financial
information. The study recommended that financial institutions come up with new
products to cover micro and small enterprises financial needs. Further, the study
recommended policy formulation and amendments that will include transparency of
financial institutions to upheld inclusion of financing. Fora and workshops to be created
to educate and inform micro and small enterprises on issues regarding financing. | en_US |
