Analysis of Factors Influencing Access to Credit Services by Women Entrepreneurs in Kenya

Research Journal of Finance and Accounting, Vol.5, No.11, 2014

9 Pages Posted: 9 Sep 2014

See all articles by John Karanja

John Karanja

Kenya Methodist University; Schoolof Business and Economics

Anthony Mwangi

Meru University of Science & Technology

Samuel Nyakarimi

Meru University of Science & Technology

Date Written: July 6, 2014

Abstract

The purpose of this study was to analyze the factors influencing access to credit services by women entrepreneurs in Kenya; a case of Isiolo town. Entrepreneurship has been regarded as a major contributing factor to the economic growth and poverty alleviation both in urban and rural areas. Organizations for Economic Co-operation and Development (OECD) reports indicate growing phenomena of women entrepreneurship both in developed and developing countries. In some countries, women-owned businesses are increasing at a very rapid pace in terms of both numbers and turnover. The scope of the study was selected from financial lending institutions in Isiolo County and women entrepreneurs targeting those who are members or have accounts in these financial institutions. There are 6 registered FIs operating within the Isiolo town which has a total of 18 management employees and 20 registered women entrepreneurs. The researcher conducted a census on the FIs managers and as well as women entrepreneurs in Isiolo town from the target population. To analyze the data, the researcher applied the chi-square testing the hypothesis of the study. The study recommends that the financial institutions should establish lending procedures which will attract women entrepreneurs and accommodate them in access of credit. It also recommended that the financial institutions should encourage the use of affordable collaterals that will ensure that women entrepreneurs are able to access credit. Lack of affordability collateral was one of the challenges that was highlighted as hindrances to women accessing credit. The financial institutions should ensure that they train women entrepreneurs on investment opportunities in order to increase purposes of credit for women entrepreneurs. This will ensure women entrepreneurs will always have a purpose to do with credit advanced to them by financial institutions.

Keywords: Lending procedures, Collateral requirements, Purpose of the loan, Access to credit services

Suggested Citation

Karanja, PhD, John and Karanja, PhD, John and Mwangi, Anthony and Nyakarimi, Samuel, Analysis of Factors Influencing Access to Credit Services by Women Entrepreneurs in Kenya (July 6, 2014). Research Journal of Finance and Accounting, Vol.5, No.11, 2014, Available at SSRN: https://ssrn.com/abstract=2493114

John Karanja, PhD (Contact Author)

Schoolof Business and Economics ( email )

Monrovia Street
Nairobi, 45240
Kenya

Kenya Methodist University ( email )

Monrovia Street
Nairobi, 45240
Kenya

Anthony Mwangi

Meru University of Science & Technology

P.O BOX 972
MERU, EASTERN 60300
Kenya

Samuel Nyakarimi

Meru University of Science & Technology

P.O BOX 972
MERU, EASTERN 60300
Kenya

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