Influence of Microfinance Services on Financial Performance of Micro, Smal and Medium Enterprises in Kirinyaga County

Abstract

This study sought to ascertain how microfinance services influenced financial performance of MSMEs in Kirinyaga County. This research was conducted in Kutus, Kirinyaga County being that we as the researchers could only access this scope due to various constraints like finances. Specifically, the study sought to determine how microcredit services, Micro-saving services and business consultancy services extended by Microfinance institutions influenced financial performance of MSMEs within the County. The study was premised on the Credit access theory, Financial intermediation theory and Micro-credit theory. The study whose target population comprised the MSMEs situated within Kirinyaga County adopted the descriptive research design. The studied MSMEs were selected randomly from the townships of Sagana, Kerugoya, Kutus, Kagio and Kagumo. The study used primary data which was collected using structured questionnaires. Analysis of the collected data was performed using descriptive and inferential statistical techniques and results presented in tables and charts. The study found that all the three constructs of the independent variable had a positive and significant influence on financial performance of MSMEs. The study therefore recommended that sustained efforts should be made by policy formulators within the County to promote and strengthen microfinancing in pursuit of the Vision 2030.