The Role Of Micro Financial Institutions On The Growth Of Smes In Kenya:A Case Study Of Micro Financial Institutions In Kisi Town

Abstract

The paper was to investigate the role the micro financial instititutions(MFIs)play in assisting small and medium enterprises(SMEs) grow in Kisii Town. The specific objectives were: To establish the role of credit provision on growth of SMEs in Kisii Town, to determine the role of training offered by MFIs in helping the SMEs to grow and role of savings account from MFIs on growth of SMEs in Kisii Town. From the sampling frame a representative sample of 100 respondents were obtained randomly and a survey was conducted on this sample using structured interview schedules. Data from the respondents was analyzed and translated into useful information using the statistical package for social sciences (SPSS). Frequency distributions were used to draw conclusions. The study established that most of the businesses obtained credit from MFIs. The study revealed that savings account offered by micro financials assist the enterpreneurs in developing a culture of saving. The survey established that accessibility of training is positively related to growth of SMEs. The study concludes that provision of credit amd training and a cheap savings account helps the growth of SMEs. The study recommends that the government and MFIs to make credit easly available and affordable to the SMEs for them to grow. The study also recommends for accessible financial training from MFIsto influence growth of SMEs. The research further recommends for affordable saving account for savings to avoid dependence of MFIs for their growth.