Socio-Economic Effects of Microfinance Services on Women: The Case of Rosewo Microfinance, Nakuru County, Kenya

Abstract

Microfinance has become an important instrument for poverty alleviation in developing countries through its provision of both the financial services and non financial services to the poor. The key feature of microfinance in targeting the women on the grounds has been noted to have more desirable sustainable development outcomes. This study thus, sought to find out the socioeconomic effects associated with the participation of women in the microfinance programs. A survey was conducted in ROSEWO organization, a microfinance institute in Nakuru County. A simple random sample of 370 women participants of at least two years experience and above was drawn from a population of 5000 members of Rosewo microfinance. A structured questionnaire was used as data a collecting tool as data was analyzed quantitively through the use of descriptive statistics from the SPSS tool and presented in form of frequencies, pie-charts and tables. The research objectives were to assess the socioeconomic effects on the accessibility of microcredit, availability of micro-savings, micro-insurance and non-financial services on women. The foundation of this study was based on the following theories and models: the vicious cycle of poverty theory, the imperfect information paradigm, and the Grameen bank model. The results indicated that microfinance services had effects on the socioeconomic status of women. The study indicated that that access to microcredit services increased income levels, increased stocks and output of the enterprise as well as increased expenditure on health and education services. On the other hand, the availability of micro-savings services to women increased capital resources to cater for education and health care services, smoothened irregular income levels to manage consumption needs and also increased income to generate wealth. Moreover the results indicated the effects of micro-insurance services enabled women build stronger trust bonds, created more social networks as well as motivate participation in development activities. Lastly, effects of non-financial services from the microfinance stabilized income levels that eased production constraints, improved