Important Dates

Conference Dates

July 20th, 2017

Deadline for Abstract Submission

2nd July 2017

Deadline for Full Paper Submission

10th July 2017

Notification of Paper Acceptance
10 days after receipt of full paper


University of Nairobi


Effect of Provision of Micro Finance on the Performance of Micro Enterprises: A Study of Youth Micro Enterprises under K-Rep Program, Kisii County, Kenya

Simeyo Otieno


Micro and Small Enterprises (MSEs) sector contributes 20% to the GDP of the Kenyan
economy. The vision of micro finance is to promote the growth of micro enterprises. In
pursuit of this vision, the rapid growth of Micro Finance Institutions (MFIs) has made
MSEs access to credit more than doubled from 7.5% in 2006 to 17.9% in 2009. Despite
this increase, a recent study has shown that over 50% of MSEs continue to have a
deteriorating performance with 3 in every 5 MSEs failing within months of
establishment. This brings to question the effectiveness of the role of micro finance in
promoting growth of micro enterprises. The objective of this study was therefore to
evaluate the effect of provision of micro finance on the performance of youth micro
enterprises under K-Rep program in Kisii County, Kenya. The study employed a cross
sectional survey design. A sample of 86 youth micro enterprises was selected from a
population of 110 youth micro enterprises using simple random sampling technique.
Primary quantitative data were collected by use of structured questionnaires and
analysed by use of descriptive statistics, multiple regression analysis and Pearson
correlation coefficient. The empirical results revealed that loan had the largest
significant effect on performance of micro enterprises with a beta coefficient of
0.385,followed by training in micro enterprise investment with a beta coefficient of
0.281 and Savings mobilization had the least but significant effect with a beta
coefficient of 0.272. Based on the research findings, the study concludes that provision
of micro finance has a significant effect on the performance of youth micro enterprises
in Kenya. Therefore provision of micro finance to the youth to engage in micro
enterprise activities will help spur economic development and alleviate youth
unemployment, in line with Kenya’s vision 2030.
Key words: Micro finance, Youth Micro enterprises, Performance

aibuma2011_submission_24.pdf20.76 KB

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