Influence of Accessibility to Finance on Growth of Small and Medium Enterprises (SMEs) Owned and Managed By Women in Migori County, Kenya

Abstract

The study utilizesa descriptive survey research design for a target population of 912 women entrepreneurs with a sample size of 273. A one-stage stratified sampling technique was used to stratify the population according to entrepreneurial activities undertaken by women. Data was analyzed using measures of central tendencies and dispersions. Frequency tables and percentages were used to present data. The study showed that women engaged in entrepreneurship because they wanted to secure employment and provide for their family needs. A large population were engaged in service sector 107(43.1%),commercial activities90(36.3%) and manufacturing sector 51(20.6%).The study revealed that raising initial start-up finance was a daunting task for women entrepreneurs and a major obstacle to expanding their business. The study further established that capital acquisition by women entrepreneurs for growing their firms faced numerous challenges including legal status of their business 80(32.3%), personal savings and resources 68(27.4%), complex documentary procedures by financial institutions25(10.1%), inadequate collateral for debt financing41(16.5%), while 9(36%) mentioned lack of awareness of availability of start-up finance. The study showed that SMEs women entrepreneurs in Kenya typically obtain their initial start-up investment and working capital from internal sources, own savings, retained earnings and loans from family and friends. While finance has been termed as a major problem, it is surprising that a high majority of women entrepreneurs had never applied for a formal bank loan due to stringent collateral requirements by banks and the risks involved should they fail to pay back the loans. Starting business is seen as solution to overcome poverty and as a means of balancing family commitment and creating employment. The study recommended urgent need for policy formulation targeting specifically women SMEs to help overcome financial obstacles which confront them during start-up and onward growth.