The Influence of Informal Group Based Financing on the Growth Of Women Owned Micro and Small Enterprises in Kibera Slum - Nairobi

Abstract

Informal Savings and Credit Groups (ISCG) are among the oldest and most prevalent savings institutions found in the world and play an important role in savings mobilization in many developing economies. Women face various barriers that inhibit their full potential in business management. The world is changing at an alarming rate prompting new challenges that are making business operation in SMEs difficult. However informal savings and credit groups as a strategy has sustained the growth of most micro and small business. In particular, the study sought to establish the relationship between Informal Group Based savings and credit services and the growth of Women Owned MSEs; to establish the relationship between Informal Group Based loans and growth of Women Owned MSEs; to establish the influence of experiences shared among the group members on the growth of women owned MSEs; to establish the influence of business partnership among group members on the growth of women owned Mses. The study applied a descriptive survey design. The target population of this study was 245 SMEs operating in the Kibera Slum Nairobi County. This study applied the simple random sampling technique to select 200 SMEs. In this study, the members of the informal savings and credit groups were the respondents. Data collected was mainly quantitative in nature and was appropriately analyzed using descriptive statistics. The descriptive statistical tools in SPSS helped the researcher to describe the data and determine the extent used. Correlation analysis was used to analyze the relationship between the variables. The results of this study were presented in both tabular and graphic formats. The study concluded that the saving services, Loans/Credit, Experience shared and Business Partnership were all significantly associated with the growth of women owned micro the small micro enterprises. The study recommends that external finance in group activities is found to have a positive contribution for enterprise growth. Therefore, adequate provision of finance should be the main element in the development programs of the groups and to all stakeholders interested in this informal group finance sector.