services profitably however the study conducted in different countries shows

Services profitably however the study conducted in

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services profitably, however the study conducted in different countries shows that there are no successful microfinance institutions .a best MFIs cover their operating cost while some of the better known are able to cover in part of funded cost of capital employed. This situations suggest that MFIs will not be stable financially. 2.2.2 Poverty reduction theory The economy is facing a lot of challenges in terms of availability of jobs in the labor market. This is brought about by the difference between the large pool professional intellectuals and small number of jobs available to accommodate them. Studies have been conducted to address this challenges and which they have ended up discussing ways on how to create jobs or employment and this can be postulate either generating wage employment or promoting self- employment. As a regard microfinance could be used as a major way of to promoting self- employment. This is done through provision of financial services to the small startups that end up providing jobs to many other people. Many writers have looked at its suitability and have agreed that microfinance alone cannot be used to reduce employment .For it to be effective it has to be combined with other factors to ensure positive outcomes. Therefore this study looks at microfinance as a tool of reducing poverty level to the people of Mombasa County. 2.3 Conceptual framework The conceptual framework is presented in the diagram below showing the independent and dependent variable. 7
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Independent Variable dependent variable Figure 2.1 Conceptual framework 2.3.1 Training services Karlan and Valdivia (2006) find that microfinance clients subjected to the training programs are more likely to maintain a clean repayment record compared to untrained clients. They argue that this results from the improved business outcome, which on average is 16 percent higher for trained clients in terms of sales. The results are however not similar to other business outcomes such as profit margins and change in the number of employees nor are there significant changes in loan size and cumulative savings due to training. The general judgment was that business training leads to shifts towards business structures that are associated with higher profitability. This is because entrepreneurs with business training have more often become multiple-business owners (Karlan and Valdivia, 2006).Second, the entrepreneurs offered business training have increased their engagement in commerce at the expense of engagement in manufacturing. Parallel to this, the bulk of indicators rank commerce as the most profitable sector and 8 Training services Provision of loans performance of Small and Medium sized Enterprises Saving facilities provision of seed capital
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manufacturing as the least profitable sector, especially in terms of profit per working hour (Bennett, 2007). Taking into account working hours, it is therefore confirm that business training enhances movements away from the least profitable sectors and towards the sectors associated with higher profits (Legerwood, 2009). Any better predictors of the future business environment
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  • Fall '15
  • Dr.Peach
  • Poverty, Microfinance Institutions

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