Effect of gender-based credit financing on the social performance of Micro and Small Enterprises in Kawangware, Kenya

Abstract

Empirical literature positions gender as a critical factor influencing access to credit, particularly by women. Drawing from this foundation, the present study aimed to expand on the existing knowledge by examining the effect of gender-based credit financing on the social performance of MSEs in Kawangware. The specific objectives were to determine the effect of gender-sensitive loan conditions; gender-based targeted financial literacy training; and gender-based credit financing lending models on the social performance of MSEs. The study was grounded on Gender and Development; Empowerment; and Social Capital theories, taking a duration of six months. Descriptive and causal-comparative designs were employed, aided by post- positivist philosophy. Census method was applied, across all the 323 registered MSEs in Kawangware, according to Nairobi City County records (2025). The target respondents were MSEs owners, both male and female to allow for comparative analysis. The unit of measurement was MSEs. Structured questionnaires were distributed through online platforms, with the aid of research assistants. Data was analysed using logistic regression model, further confirmed by linear regression and results presented in the form of tables and figures. The study found that collateral loan requirements, loan repayment terms, credit ceilings, debt management, group lending models and digital lending models have positive significant influence on the social performance of MSEs. These factors mainly affected women, who in the contrary, yield better social performance outcomes of MSEs. The study recommended formulation and effective implementation of policy frameworks that will enable women access higher credit facilities to improve social performance indicators of MSEs. The findings are likely to be of significance to policy makers, lending institutions, MSEs owners and other scholars, implying the need for gender-responsive financial policy implementation frameworks and lending practices that promote inclusivity in Kenya.

Key words: Gender-based credit financing; Micro and Small Enterprises (MSEs); Social performance; Gender Financing gap; Male-Women entrepreneurship; Credit access; Urban Informal Settlement, Kenya.