Abstract:
Micro and Small Enterprises (MSEs) are of great importance because of their
role in the economic growth and poverty reduction in many countries.
However, many studies carried out on these enterprises reveal that they are
faced with a number of challenges including access to finance despite the
numerous financial institutions available. This study assessed the effect of
services offered by Microfinance Institutions (MFIs) on the performance of
MSEs in Kariobangi Light Industry Nairobi, Kenya. This study was conducted
in Kariobangi Light Industries, in Nairobi County and targeted operators of
MSEs. The specific objectives of this study were; to establish the effect of
MFIs’ saving services on the performance of MSEs in Kariobangi Light
Industry, to establish the effect of MFIs’ loan services on the performance of
MSEs in Kariobangi Light Industry and to investigate the effect of MFIs’
training services on the performance of MSEs in Kariobangi Light Industry.
These objectives sought to answer the following questions: what is the effect
of MFIs’ saving services on the performance of MSEs in Kariobangi Light
Industry?What is the effect of MFIs’ loan services on the performance of
MSEs in Kariobangi Light Industry? and, what is the effect of MFIs’ training
services on the performance of MSEs in Kariobangi Light Industry?The study
adopted descriptive research design targeting a complete census of 210
MSEs. Primary data was collected using structure questionnaires while
secondary data was collected from relevant literature. The study used self-
administered questionnaires to collect primary data from the respondents.
Data collected was analyzed both descriptively and statistically. Quantitative
data was analyzed using descriptive statistics such as frequencies, modes,
means and standard deviations. Likert type data was analyzed using mode
as the focal point of discussion. A Cross-tabulation of variables was
generated to determine the relationship between the study variables. Linear
regression and Chi-Square test was conducted to determine the effects of
MFI on the performance of MSEs in the study area. Analysed data from a
response rate of 86% was presented in tables and charts to represent
quantitative findings. Interpretation of data and inferences were made to
describe the research findings. The study findings revealed MFI saving and
loan services have positively influenced the performance of MSEs in
Kariobangi Light Industries but the training services have not contributed
positively. The study recommends there is need for MFIs and MSEs
stakeholders to come up with measures of addressing the poor performing
training component of MFIsservices in Kenya.
