IMPROVING ACCESS TO BANKING PRODUCTS AND SERVICES FOR SMALL AND MEDIUM ENTERPRISES IN KENYA.

2017 ◽  
Vol 2 (3) ◽  
pp. 47
Author(s):  
Michael Njeru Njue ◽  
Marion Mbogo
Keyword(s):  
Small Businesses ◽  
Commercial Banks ◽  
Small And Medium Enterprises ◽  
Credit Scoring ◽  
Financial Education ◽  
Target Population ◽  
Survey Study ◽  
Sampling Frame ◽  
Access To Credit ◽  
Financial Products

Purpose: The purpose of this study was to highlight the need for banks to develop financial products and services for small and medium enterprises.Methodology:The research design was descriptive survey study. The target population was 46 commercial banks .The sampling frame was the list of commercial banks given at the Central bank of Kenya Website. A sample of 17 banks was selected using random sampling. The second stage of sampling involved the selection of the respondents using a stratified sampling approach. The strata were the various departments that interact with SMEs in a bank. The respondents were the head of departments of the respective departments that form the strata. Both qualitative and quantitative data was collected using a questionnaire that consisted of both open ended and close ended questions. Data was analysed using Statistical Package for Social Sciences (SPSS.Results: One of the study objectives was to establish the level of access to financial products and services offered by the banks to SMEs. Results from the bank manager’s perspective indicated that the level of access to finance was high, but the bank clients indicated otherwise, that it was low. The other objective of the study was to determine the factors that hinder the SMEs from accessing the financial products offered by banks. Results indicated that several factors influence access of SMEs to finance. These factors include gender, level of education, size of the business, age of the entrepreneur, collateral, and level of income for the entrepreneurs. All the factors had a negative effect on the access of finances from the banks by SMEs and hence indicate SMEs low access to financial products. Another objective of the study was to establish the tools or systems required to improve accessibility to financial products offered. Results indicated that there are tools and systems put in place by banks to improve accessibility to financial products offered to small and medium enterprises.Unique contribution to theory, practice and policy:The study recommended that training be emphasized to SME entrepreneurs on financial matters, all gender to be treated equally, the banks to introduce financial education programs for SMEs to improve their access to credit, banks to further make use of a credit scoring system to assess the credit worthiness of small businesses and to introduce the use of new credit bureau regulations to increase SME finances.

TOOLS OR SYSTEMS FOR IMPROVING ACCESSIBILITY TO FINANCIAL PRODUCTS AND SERVICES.

2017 ◽  
Vol 2 (4) ◽  
pp. 17
Author(s):  
Michael Njeru Njue ◽  
Marion Mbogo
Keyword(s):  
Small Businesses ◽  
Commercial Banks ◽  
Credit Scoring ◽  
Financial Education ◽  
Target Population ◽  
Survey Study ◽  
Sampling Frame ◽  
Access To Credit ◽  
Financial Products ◽  
Negative Effect

Purpose: The purpose of this study was to highlight the need for banks to develop financial products and services for small and medium enterprises.Methodology:The research design was descriptive survey study. The target population was 46 commercial banks .The sampling frame was the list of commercial banks given at the Central bank of Kenya Website. A sample of 17 banks was selected using random sampling. The second stage of sampling involved the selection of the respondents using a stratified sampling approach. The strata were the various departments that interact with SMEs in a bank. The respondents were the head of departments of the respective departments that form the strata. Both qualitative and quantitative data was collected using a questionnaire that consisted of both open ended and close ended questions. Data was analyzed using Statistical Package for Social Sciences (SPSS.Results: One of the study objectives was to establish the level of access to financial products and services offered by the banks to SMEs. Results from the bank manager’s perspective indicated that the level of access to finance was high, but the bank clients indicated otherwise, that it was low. The other objective of the study was to determine the factors that hinder the SMEs from accessing the financial products offered by banks. Results indicated that several factors influence access of SMEs to finance. These factors include gender, level of education, size of the business, age of the entrepreneur, collateral, and level of income for the entrepreneurs. All the factors had a negative effect on the access of finances from the banks by SMEs and hence indicate SMEs low access to financial products. Another objective of the study was to establish the tools or systems required to improve accessibility to financial products offered. Results indicated that there are tools and systems put in place by banks to improve accessibility to financial products offered to small and medium enterprises.Unique contribution to theory, practice and policy:The study recommended that training be emphasized to SME entrepreneurs on financial matters, all gender to be treated equally, the banks to introduce financial education programs for SMEs to improve their access to credit, banks to further make use of a credit scoring system to assess the credit worthiness of small businesses and to introduce the use of new credit bureau regulations to increase SME finances.

LEVEL OF ACCESS TO FINANCIAL PRODUCTS AND SERVICES FOR SMALL AND MEDIUM ENTERPRISES IN KENYA.

2017 ◽  
Vol 2 (3) ◽  
pp. 31
Author(s):  
Michael Njeru Njue ◽  
Marion Mbogo
Keyword(s):  
Small Businesses ◽  
Commercial Banks ◽  
Small And Medium Enterprises ◽  
Credit Scoring ◽  
Financial Education ◽  
Target Population ◽  
Survey Study ◽  
Sampling Frame ◽  
Financial Products ◽  
Medium Enterprises

Purpose: The purpose of this study was to highlight the level of access to financial products and services for small and medium enterprises in KenyaMethodology:The research design was descriptive survey study. The target population was 46 commercial banks .The sampling frame was the list of commercial banks given at the Central bank of Kenya Website. A sample of 17 banks was selected using random sampling. The second stage of sampling involved the selection of the respondents using a stratified sampling approach. The strata were the various departments that interact with SMEs in a bank. The respondents were the head of departments of the respective departments that form the strata. Both qualitative and quantitative data was collected using a questionnaire that consisted of both open ended and close ended questions. Data was analysed using Statistical Package for Social Sciences (SPSS.Results: The study objectives were to establish the level of access to financial products and services offered by the banks to SMEs. Results from the bank manager’s perspective indicated that the level of access to finance was high, but the bank clients indicated otherwise, that it was low. The other objective of the study was to determine the factors that hinder the SMEs from accessing the financial products offered by banks. Results indicated that several factors influence access of SMEs to finance. These factors include gender, level of education, size of the business, age of the entrepreneur, collateral, and level of income for the entrepreneurs. All the factors had a negative effect on the access of finances from the banks by SMEs and hence indicate SMEs low access to financial products. Results also indicated that there are tools and systems put in place by banks to improve accessibility to financial products offered to small and medium enterprises.Unique contribution to theory, practice and policy:The study recommended that training be emphasized to SME entrepreneurs on financial matters, all gender to be treated equally, the banks to introduce financial education programs for SMEs to improve their access to credit, banks to further make use of a credit scoring system to assess the credit worthiness of small businesses and to introduce the use of new credit bureau regulations to increase SME finances.

FACTORS HINDERING SMES FROM ACCESSING THE FINANCIAL PRODUCTS OFFERED BY BANKS

2017 ◽  
Vol 2 (3) ◽  
pp. 67 ◽  
Author(s):  
Michael Njeru Njue ◽  
Marion Mbogo
Keyword(s):  
Small Businesses ◽  
Commercial Banks ◽  
Credit Scoring ◽  
Financial Education ◽  
Target Population ◽  
Survey Study ◽  
Sampling Frame ◽  
Access To Finance ◽  
Financial Products ◽  
Credit Worthiness

AbstractPurpose: The purpose of this study was to highlight the factors hindering SMES from accessing the financial products offered by banks.Methodology:The research design was descriptive survey study. The target population was 46 commercial banks .The sampling frame was the list of commercial banks given at the Central bank of Kenya Website. A sample of 17 banks was selected using random sampling. The second stage of sampling involved the selection of the respondents using a stratified sampling approach. The strata were the various departments that interact with SMEs in a bank. The respondents were the head of departments of the respective departments that form the strata. Both qualitative and quantitative data was collected using a questionnaire that consisted of both open ended and close ended questions. Data was analyzed using Statistical Package for Social Sciences (SPSS.Results:It can be concluded that there were several factors that hindered SMEs access to financial products and services. In particular these factors included lack of credit worthiness information about SMES, lack of collateral limits the SME access to finance, low net value of the entrepreneurs in terms of assets and liabilities (Capital) limits SME access to finance borrower’s lack of honesty and trustworthiness (character) limits SME access to finances.Unique contribution to theory, practice and policy:The study recommended that training be emphasized to SME entrepreneurs on financial matters, all gender to be treated equally, the banks to introduce financial education programs for SMEs to improve their access to credit, banks to further make use of a credit scoring system to assess the credit worthiness of small businesses and to introduce the use of new credit bureau regulations to increase SME finances.

scholarly journals Financing MSMEs (Micro Small and Medium Enterprises) in Nigeria: Implications of Transaction Costs

2018 ◽  
Author(s):  
Oluseye Ajuwon ◽  
Sylvanus Ikhide ◽  
Joseph Akotey
Keyword(s):  
Financial Institutions ◽  
Small Businesses ◽  
Small And Medium Enterprises ◽  
Survey Method ◽  
Access To Finance ◽  
Access To Credit ◽  
Transactions Cost ◽  
Medium Enterprises ◽  
The Impact ◽  
Depth Interviews

This study investigated the roles of transactions cost in MSMEs access to finance. This was done by investigating the impact of transactions cost on access to credit from both MSMEs and financial institutions (commercial banks and microfinance banks). From the MSMEs’ side, borrowing experience, decision lag, firm size and borrowers’ distance to the loan office were investigated. On the financial institution’s side, the costs of information gathering, loan administration, monitoring and loan enforcement were investigated. We used the questionnaire survey method, in-depth interviews and case studies, as well as the annual financial statements of the banks. We identified interest rate and collateral value as constraints to access to finance for MSMEs. We also found financial institutions’ attitude to MSMEs access to credit was not friendly. Financial institutions need to do more to bring down transaction cost of lending. This hopefully can be achieved by investing more in agent banking which would lower operating costs, as well as spreading risk, and ultimately increase credit intermediation to small businesses.

scholarly journals SMEs and Economic Growth in Nigeria: An Autoregressive Distributed Lag Approach

2015 ◽  
Vol 3 (2) ◽  
pp. 1-16
Author(s):  
Ishola Wasiu Oyeniran ◽  
Oladipo Olalekan David ◽  
Oluseyi Ajayi
Keyword(s):  
Economic Growth ◽  
Small Businesses ◽  
Socioeconomic Development ◽  
Positive Impact ◽  
Small And Medium Enterprises ◽  
Infrastructure Development ◽  
Access To Credit ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run

This empirical study adopts an autoregressive distributed lag approach in order to examine how small and medium enterprises (SMEs) have contributed to economic growth in Nigeria between 1981 and 2013. We find that investment in SMEs has had a significant and positive impact on economic growth in the country. Given that Nigeria is economically underdeveloped, it is essential that the majority of its (largely rural) population be integrated into the process of economic development through entrepreneurship in small businesses. This means encouraging further investment in SMEs and prioritizing their access to credit facilities, infrastructure development, and capacity building to promote long-run socioeconomic development through this medium.

scholarly journals A construction Industry Case Factors of commercial banks’ loan eligibility of small businesses in South Africa: a construction industry case

2020 ◽  
Vol 7 (3) ◽  
pp. 416-430
Author(s):  
Lindy Mtsweni Yolande Mtsweni
Keyword(s):  
South Africa ◽  
Construction Industry ◽  
Small Businesses ◽  
Commercial Banks ◽  
Qualitative Methodology ◽  
Credit Scoring ◽  
Assessment Process ◽  
Small Enterprise ◽  
Loan Terms ◽  
Major Factors

This study determines the factors that affect commercial banks’ loan eligibility of small businesses in the construction industry in South Africa. A multiple case study design and six randomly selected small businesses (i.e., three unsuccessful-declined and three successful-approved loan applicants) were used in this study. The qualitative methodology was applied to interview three senior managers from a commercial bank and six senior officials of the businesses, which had undergone the assessment process. The small enterprise assets finance applications of interviewed clients’ outcomes and the credit scoring outcomes either formal complaint letters or minutes were also evaluated after the credit scoring decision had been made to obtain more in-depth data. The main finding of the study was that client’s relationship, background, character, collateral, capital, capacity and affordability are major factors of loan eligibility of small businesses in South Africa. Of particular importance was that, typical relationship-based term loans were based on a business relationship built over years of lending, allowing for substantial flexibility in loan terms.

scholarly journals THE IMPACT OF COLLECTIVE INVESTMENT SCHEMES ON FINANCIAL INCLUSION IN KENYA

2016 ◽  
Vol 1 (1) ◽  
pp. 54-73
Author(s):  
Peninah Kimani ◽  
Dr. Sifunjo Kisaka
Keyword(s):  
Social Economic ◽  
Target Population ◽  
Financial Inclusion ◽  
Survey Study ◽  
Qualitative And Quantitative ◽  
Second Stage ◽  
Financial Products ◽  
Descriptive Survey ◽  
The Impact ◽  
Selection Of

Purpose: The purpose of this study was to determine the impact of collective investment schemes in financial inclusion in Kenya.Methodology: The research design was descriptive survey study in nature since it focused on all collective investment schemes in Kenya. The target population was collective investment schemes. A sample of 11 collective schemes was selected using random sampling. The second stage of sampling involved the selection of the respondents using a stratified sampling approach. The strata were the various respondents in the schemes. Both qualitative and quantitative data was collected using a questionnaire that consisted of both open ended and close ended questions. Data was analysed using Statistical Package for Social Sciences (SPSS) and results presented in frequency tables to show how the responses for the various questions posed to the respondents. The data was then analysed in terms of descriptive statistics like frequencies, means and percentages.Results: The findings implied The study concludes that there was low access to financial products in the investment schemes. It is also possible to conclude that the there were several factors that affect financial inclusion in Kenya. These factors include age of the investor, gender, level of education and level of income.Unique contribution to theory, practice and policy: The study recommended that measures such as target marketing the segments with low access to collective investments and increasing the market budget to investors on financial matters, may be adopted. Such measures would ensure gendered financial inclusion, and inclusion of social economic classes characterized by age, level of income, education and rural urban classes.

scholarly journals Examining the Contribution of Interest Rate Capping Conditions on Financial Performance of Women-Owned Agribusiness SMEs in Nyeri Central Sub County, Kenya

2019 ◽  
Vol 5 ◽  
pp. 1
Author(s):  
Richard M. Kiai ◽  
Kellen Kiambati ◽  
◽  
Keyword(s):  
Interest Rate ◽  
Financial Performance ◽  
Poverty Reduction ◽  
Small And Medium Enterprises ◽  
Low Cost ◽  
Target Population ◽  
Financial Inclusion ◽  
Access To Credit ◽  
Customer Information ◽  
Medium Enterprises

Financial inclusion has remained a critical driver toward poverty reduction in an economy. There has also been much focus on financial inclusion of women as they tend to be marginalized by the mainstream financial institutions. Kenya on its part has achieved high levels of financial inclusion. Access to bank services has been easy and at a low cost. Till 2016, access to credit has also been easy for all persons with bankable ideas in all sectors including agriculture for either gender. However, this changed after the review of the Banking Act that introduced the interest rate capping in the financial market. The purpose focused on increased collateral requirement and additional customer information requirements on the financial performance of women-owned Agribusiness small and medium enterprises (SMEs). The target population of this study was 950 licensed women SMEs with a sample of 274 licensed SMEs. From the study, collateral requirement due to interest rate capping had a negative and statistically insignificant effect (r = -0.114, p = 0.079) on the financial performance. On a positive note, the study found that additional customer information requirement due to interest rate capping had a positive and statistically significant contribution (r = 0.437, p = 0.000) on financial performance of agribusiness SMEs. The study concluded that effective maintenance of financial records not only helps SMEs access credit but also help them improve performance. This study strongly recommends capacity building among women on maintenance of financial records as it will improve access to credit and performance of their businesses.

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