DOC-20190430-WA0000[1].docx - ROLE OF MICROFINANCE IN SMALL AND MEDIUM ENTERPRISES A CASE OF BARINGO TOWN MERCY JERUTO KANGONGO A Research Project

DOC-20190430-WA0000[1].docx - ROLE OF MICROFINANCE IN SMALL...

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ROLE OF MICROFINANCE IN SMALL AND MEDIUM ENTERPRISES; A CASE OF BARINGO TOWN. MERCY JERUTO KANGONGO A Research Project Submitted to the School of Business and Economics in partial fulfillment of Degree of Business Management Business Administration option. Kirinyaga University APRIL, 2019
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DECLARATION I declare that this project is my original work and has never been submitted for a degree in this University or any other university for examination/academic purpose. MERCY JERUTO KANGONGO BE103/G/1106/15 Signature…………………………………... Date……………………………. This research project has been submitted for examination with my approval as the University Supervisor. Mrs. LUCY MUTURI Signature …………………………… Date…………………………… …… ii
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DEDICATION I wish to dedicate this research project to my parents Mr. and Mrs. Samson Kangogo for their moral and financial support throughout all my academic endeavors and the motivation towards my success. Secondly to my brothers Daniel and Samuel for their continuing motivation and support. iii
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ACKNOWLEDGEMENTS I wish to express my joy, pleasure and appreciation to my God Lord for the health and strength He gave me at this period of project writing. The School of Business and Economics Kirinyaga University, for their guidance and support during my studies. My project supervisor Mrs. Lucy Muturi for her patience, positive criticism, passion to see me excel and persistent guidance in preparing this project. Thank you so much for your time, I enjoyed being your student. I am grateful to all lecturers in School of Business. I would like to sincerely thank my parents for their prayers and encouragement. You are simply the best of the best. iv
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ABSTRACT Microfinance is an economic development approach that involves providing financial services, through institutions, to low-income clients, where the market fails to provide appropriate services. It is a component of microfinance and was the extension of small loans to entrepreneurs, who are too poor to qualify for traditional bank loans. The purpose of the study was be to establish the effect of microfinance credit on financial performance of MBEs in Baringo. The specific objectives of the study were to ascertain the effect of access to microfinance on setting up of new business, to assess the effect of cost of funding on survival of SMEs Baringo County and to determine the effect of terms of funding of MFIs on growth of SMEs in Baringo County. The study sought to study whether there was a direct relationship of access to credit and financial performance of the microbusiness enterprises. It also sought to analyze the entrepreneurial benefit from loans from microfinance institutions, the business enterprises seek financial assistance from the MFIs due to application process, interest rate, easy loan repayment, terms of repayment and amount offered. The project also captures significant theory as such microfinance credit theory in its literature review. This research problem was studied through the use of survey design. A sample of 30 respondents was selected for the work
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