Effect Of Credit And Education On Performance Of Micro And Small Enterprises In Kenya


  • Department: Economics
  • Project ID: ECO0907
  • Access Fee: ₦5,000
  • Pages: 92 Pages
  • Reference: YES
  • Format: Microsoft Word
  • Views: 371
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Micro and small enterprises are pivotal to the Kenyan economy through employment creation, provision of goods and services, fostering innovation and enhancing competition. Research has however shown that most of these enterprises experience stagnated growth with 46 percent closing business within the first year of their operation. Key among the reasons for closing business is due to shortage of operating funds and lack of proper managerial skills to carry out the day-day operations of the enterprises. Various studies have been undertaken to determine the effect of support services on enterprise performance but no study has been carried out using the 2016 enterprise survey data which is the most recent and comprehensive survey in Kenya. The purpose of this study was to establish the effect of credit and owner/manager educational qualification on performance of micro and small enterprises in Kenya and their joint effect using the 2016 MSMEs survey data. This is cross-sectional data collected from a population of 50,043 enterprises. A sample of 384 enterprises was used in the analysis as obtained using Fisher’s (2003) formula for computing sample size from a large population. Inferential statistics was used to interrogate the relationship between the variables. Regression results indicated that both access to credit services and educational qualification had a positive and significant effect on performance of the sampled enterprises. Further analysis indicated that the joint effect of the two variables was greater than their individual effect. Recommendations of this study are that the central Bank of Kenya should focus more on lending and credit facilitation programs in order to encourage greater bank-led financing to the sector to help bridge the unmet demand for credit and that micro and small enterprises should be encouraged to establish good credit history with various lending institutions to enable them access credit facilities from financial institutions. In addition, owners/managers of the enterprises should be provided with training on managerial and technical skills to complement their educational qualifications in running the enterprises. 

  • Department: Economics
  • Project ID: ECO0907
  • Access Fee: ₦5,000
  • Pages: 92 Pages
  • Reference: YES
  • Format: Microsoft Word
  • Views: 371
Get this Project Materials
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