Effect of microfinance funding on the liquidity of Micro and Small Enterprises in Madaraka area
Date
2020
Authors
Njoroge, E. W.
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Journal ISSN
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Publisher
Strathmore University
Abstract
The title of this research is effect microfinance funding on the liquidity of micro and small business, a case study in Madaraka area. Microfinance is "the provision of financial services to low-income poor and very poor self-employed people". Most businesses in Madaraka failed due to lack of insufficient capital to help them run their business. The main objective of the study was effect of Microfinance funding on the liquidity of micro and small businesses located in Madaraka area. It helped to understand how variables like loan interest, loan size, loan collateral, loan amount and loan disbursement affects the liquidity of businesses in Madaraka area. The micro and small business help in the creation of employment in the country y and the county in general. The specific objectives of the study include ascertaining the variables, such as loan interest, loan size, loan collateral, loan amount and loan disbursement on the effect of liquidity on small businesses in Madaraka area. The research problem was studied through the use of questionnaires. Out of the 1000 SMEs licensed, according to Nairobi city council records. This study randomly sampled 40 SME"s. The study found that there is a direct relationship of access to credit and financial performance of this enterprises. The study also concludes that the enterprises benefit from loans from microfinance institutions, the enterprises in Madaraka seek financial assistance from the MFIs due to interest rate, easy loan repayment and amount offered. It was recommended, in order to provide an enabling environment for SME"s to grow and thrive, therefore there is a need to develop strategies to enhance increased access to microfinance credit by small and medium enterprises from commercial banks and microfinance institutions.
Description
Full - text undergraduate research project
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Citation
Njoroge, E. W. (2020). Effect of microfinance funding on the liquidity of Micro and Small Enterprises in Madaraka area [Strathmore University]. http://hdl.handle.net/11071/16068