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Factors Affecting Access to Credit By Small and Medium Enterprises in Kenya: A Case Study of Agriculture Sector in Nyeri County.

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dc.contributor.author Thuku, Ann Gathoni
dc.date.accessioned 2018-01-12T10:09:38Z
dc.date.available 2018-01-12T10:09:38Z
dc.date.issued 2017
dc.identifier.uri http://erepo.usiu.ac.ke/11732/3508
dc.description A Project Report Submitted In Partial Fulfillment of the Requirement for the Degree of Masters of Business Administration (MBA) en_US
dc.description.abstract The purpose of the study was to access factors affecting access to credit by Small and Medium Enterprises (SMEs) from financial institutions in Kenya, a case study of Nyeri County. The research was guided by the following objectives: to determine the influence of firm’s characteristics on SMEs access to credit in Nyeri County, Kenya, to determine entrepreneur’s characteristics on SMEs access to credit in Nyeri County, Kenya, to establish the influence of financial characteristics on SMEs access to credit in Nyeri County, Kenya. A descriptive research design was employed to gather quantifiable information through use of open and close-ended questions. The target population was 200 SMEs in agriculture sector that have been in operation for more than 3 years. Stratified random sampling was used to select a sample size of 67. Data was analyzed using descriptive statistics and Statistical Package of Social Sciences (SPSS). Data obtained was coded according to different variables and descriptive statistics such as frequencies, mode, mean percentiles, variances and standard deviations was used to interpret. Tables, figures and charts were used for analysis and interpretation of data. Pearson correlation and regression analysis was done to determine the influence of independent variables on the dependent variable. The findings on firm characteristics and access to credit revealed that majority of the respondents agreed that size of a firm and location affects access to finance and older firm (more than 3 years) have more experiences of applying for loans than younger firms below 3 years. Credit does not enable SMEs to meet their expansion plan. The findings on financial characteristics and access to credit revealed that respondents agreed that they have adequate book keeping records hence easy access to credit and audited financial statements and lack of collateral affects access to finance. Financial institutions are more reluctant to provide long term finance to SME’s and credit does not have a positive effect on business performance and growth. The findings on entrepreneur characteristics and access to credit revealed that banks prefer women to men when issuing credit. Use of networking does not influences access, groups/chama to financeuse of political ties and level of education / training does not influence access to finance. The study concluded that small SME’s experience a challenge accessing loans from banks as compared to big SME’s, location of a firm also affects access to finance, banks prefer lending to women than men, access to finance is not influenced by networking, applying as a group, political, SME’s have adequate book keeping records which have made it easy for them to access credit; audited financial statements and collateral are needed before a loan is approved. SME’s are not able to generate profit due to challenges accessing credit, credit does not enable SME’s achieve or meet their, banks are reluctant to issue SME’s loan and credit does not have a positive effect on performance and growth. The study only focused access to credit by SME’s in the agricultural sector. It is recommended that other studies be done to determine other factors that affect access to finance. Further studies should also be conducted on the role of financial sector in development of agriculture sector. en_US
dc.language.iso en en_US
dc.publisher United States International University - Africa en_US
dc.subject Access to Credit en_US
dc.subject Small and Medium Enterprises en_US
dc.subject Kenya en_US
dc.subject Agriculture Sector in Nyeri County en_US
dc.title Factors Affecting Access to Credit By Small and Medium Enterprises in Kenya: A Case Study of Agriculture Sector in Nyeri County. en_US
dc.type Thesis en_US


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