Group Lending Mechanisms and Growth of Women Enterprises Funded by Kenya Women Finance Trust in Kericho County

Abstract

Access to business finance is the backbone of small and medium enterprises’ success. Women have been involved in economic development in both developed and developing countries because of engaging in business activities that create employment and enhance livelihoods. Women in urban and rural obtain credit services through group formation rather than individual because of the challenges they face, such as lack of collateral. However, attaining financial inclusion through group lending has seen many women left out in this process due to the lending models and approaches utilised by these institutions. Previous studies have demonstrated that women may access financial credit from micro-finance institutions through a corresponding growth in women’s enterprises remains unknown. This study, therefore, sought to establish the relationship between group lending mechanisms and the growth of women enterprises funded by Kenya Women Finance Trust in Kericho County. Specifically, the study assessed the relationship between group characteristics and the growth of women’s enterprises funded by Kenya women’s finance trust. The study adopted a correlation research design with a target population is 636 members from 70 women enterprises in Kericho County. A sample of 245 women was selected using a stratified sampling technique. A questionnaire was used to collect primary data. Validity was determined through piloting, where the researcher compared the actual outcome against predicted responses. Reliability was determined using Cronbach’s alpha to examine the reliability, where a coefficient value of 0.895 was found and thus deemed reliable. Collected data was coded into a statistical package for social statistics version 23 and analysed through descriptive statistics and inferential statistical analysis. Data were presented as frequency tables, pie charts, and graphs. The study established that group characteristics had a significant effect on the financial growth of women enterprises funded by Kenya Women Finance Trust in Kericho County. The study concluded that group mechanisms through group characteristics had a significant effect on the growth of women. Therefore, the study recommended that the government should increase theamount of grants and loans offered to various business groups to improve access to credit to the group as well as encourage group loans in Micro-Finances Institutions.