IMPACT OF MICRO FINANCE INSTITUTIONS ON POVERTY ERADICATION IN MERU SOUTH SUB-COUNTY, KENYA

Abstract

Purpose: The purpose of the study was to assess the impacts of micro finance institutions in eradication of poverty in Meru South Sub CountyMethodology: This research problem employed a descriptive research design. The target population for this study comprises of all beneficiary households of MFIs in Meru South Sub County. The sample size was 30% of the target population.Results: The study found that microfinance institutions are a very strong tool in poverty alleviation at household level with income after acquiring microfinance credit being found to have significantly increased. The study further found that microfinance credit empowers the poor, enables them to cope with and overcome many of the problems that they face. Additionally, microfinance loans were found to have led to establishment and expansion of businesses, acquisition of shelter, education, access to health care and opening up of opportunities for the poor to improve their living standards including improved sanitation.Unique contribution to theory, practice and policy: the study recommends that microfinance institutions to continuously improve their outreach to enable them reach more deserving low income earners in all Counties in Kenya. To achieve this, the institutions should effectively market themselves and also fasten on service delivery as in the case of ensuring that loans applied for are disbursed on time.