EFFECTS OF MICROFINANCE INTERVENTIONS BY MICROFINANCE INSTITUTIONS ON WOMEN EMPOWERMENT: A CASE OF NAKURU CBD WEST SUB-COUNTY, KENYA

Abstract

Microfinance has built up a lot of attention as a way to eradicate poverty and empowering women. According to the Nakuru County Integrated Development Plan Report (CIDPP 2018-2022), low outreach of microfinance interventions by MFIs to encourage women empowerment in Nakuru CBD is evidenced by the fact that the MFIs are less than ten years in operation. This study sought to establish the effects of microfinance interventions by microfinance institutions on women empowerment in Nakuru CBD West Sub-County, Kenya. It focused on four specific objectives: to determine the effect of micro credit on women empowerment, to examine the effect of micro savings on women empowerment, to assess the effect of micro insurance on women empowerment and to establish the effect of training on women empowerment. The study was guided by viscous cycle of poverty theory, mental accounting theory, prospect theory, human capital theory and women empowerment theory. A descriptive survey and cause effect research design was employed. The study targeted a member from each of the women having income generating ventures groups in the Nakuru West Sub-County engaging in microfinance. The sample of 127 respondents from a target population of 293 women groups was collected using the simple random technique. This research followed the use of the questionnaire as a key data collection method, which had been built on a five- point Likert scale. The data was analysed with the aid of Statistical Package for Social Sciences (SPSS) including instruments like frequencies, percentages, cross tabulations, Chi square of test of good fit and independence had been employed. Inferential statistical analysis were conducted using the Pearson Correlation Coefficient, ANOVA and multiple regression analysis to establish the relationship between the dependent and independent variables. Analyzed data was presented inform of statistical tables, charts and graphs. Results show that except for micro insurance (t=1.247, p=0.217), other MFI interventions such as microcredit (t=5.105, p=.000), micro savings (t=7.614, p=.000) and training (t=3.263, p=.002) significantly and positively affect empowerment of women. This study concludes that for efficient realization of positive effects, the microcredit has to be readily accessed and the interest rates be very flexible to attract many, the process of savings withdrawals from savings accounts in MFIs should be timely, micro insurance services should be able to reach women and non-financial services complements the rest to realize the positive effects on user since these non-financial services sharpens personal skills. Some of the recommendations made include; The regulators of micro finance institutions should have a policy that will regulate the rate of interest charged as women entrepreneurs felt that the interest rates were too high and hence some were reluctant to take loans, Micro finance institutions should reduce the cost of training sessions or provide it as a complementary free service for the first year to all their clients in order to allow a larger number of women entrepreneurs to access training and hence get empowered and the design of micro savings should be changed so that it can be aligned to the client’s needs such that withdrawal procedures should be made more easy and the time period for consequent withdrawals be reduced.