Influence of Crediting Strategy on Growth of Small and Micro Enterprises in Kenya: A Case of Women Enterprise Fund

Main Article Content

Tom Ongesa Nyamboga
Edwin Odhuno
Walter Okibo Bichanga


Effective implementation of crediting strategy is paramount to the growth of Small and Micro Enterprises (SMEs) worldwide. Crediting provides adequate amount of initial capital needed by entrepreneurs to establish and operate their businesses. The government of Kenya having realized this scenario initiated the formation of Women Enterprise Fund (WEF) in 2007 as a micro credit to provide financial credit to women entrepreneurs throughout the country. Despite this, many women micro traders have inadequate access to credit to start and expand their SMEs. The specific objective of this study was to assess the influence crediting strategy on the growth of SMEs in Kenya. This research used a descriptive survey based design. The study’s target population constituted 2032 women group leaders from which a sample size of 335 respondents was selected randomly. Primary data was collected by use of structured researcher administered questionnaires. Data collected was analyzed by use of both descriptive statistics and inferential statistics, by the aid of SPSS version 24. Both Analysis of Variance (ANOVA) and Linear Regression Analysis were computed to correlate the study’s variables. The study established a positive relationship between crediting strategy and the growth of SMEs. The findings of this study will help the government of Kenya in formulating and implementing crediting strategies that would make credit accessible and therefore boost growth of SMEs in the country. The study recommends that the government establishes policies that will necessitate accessibility of credit to SMEs in the country.

Crediting strategy, small and micro enterprises, women enterprise fund; entrepreneurs, constituency women enterprise scheme, Government of Kenya.

Article Details

How to Cite
Nyamboga, T. O., Odhuno, E., & Okibo Bichanga, W. (2019). Influence of Crediting Strategy on Growth of Small and Micro Enterprises in Kenya: A Case of Women Enterprise Fund. Asian Journal of Economics, Business and Accounting, 13(1), 1-17.
Original Research Article


Hussein MH. The Relationship between credit accessibility growth of small and micro enterprises in Langata constituency. Published MBA project; 2015.

Buchanan L. American entrepreneurship is actually vanishing: Issue of INC magazine; 2015.

Canbin H. Poverty Alleviation through Community Participation, China; 2013.

Yulanda W. Poverty reduction of rural women in China — General situation and expectation; 2014.

World Bank. The effect of women’s economic power in Latin America and the Caribbean. World Development Report; 2012.

Salman AY, Oyebiyi GT, Emenike OA. Influence of financial inclusion on small and medium enterprises growth and development in Nigeria. International Journal in Management and Social Sciences. 2015;3(4):390-401.

Nyamboga, Bichanga, Odhuno. Evaluation of government micro crediting strategy on the growth of small and micro enterprises: Case of women enterprise fund in Kenya. Case Studies Journal. 2017;1-15(6):12.

Zidana R. SMEs Financing and Economic Growth in Malawi. Measuring the Impact between; 2014.

Asmamaw YC. The impact of microfinance on living standards, empowerment and poverty alleviation of the poor people in Ethiopia: A case study in ACSI, Research Journal of Finance and Accounting. 2014;5:13.

Hassan IB, Mugambi F. Determinants of growth for women owned and operated micro enterprises: The case of Garissa county. International Journal of Business and Commerce. 2013;2(7):45-55.

Capital markets authority. Capital raising opportunities for SMES: The development of micro-cap securities markets in Kenya. Nairobi: Capital Markets Authority; 2010.

Munoz in Nabutola J. Factors Influencing Performance of SMEs in Central Business District Bungoma County, Kenya; 2010.

Suryadevara SS. The effect of micro finance credit on the performance of small and medium enterprises in Nairobi. Published MBA Project, United States International University, Africa; 2017.

Wambui MD. The effects of micro finance services growth of small and medium enterprises in Kajiado County. Published MBA Project; 2015.

Mokua K. Factors influencing credit of small scale business enterprises, in Kisii County, Kenya. Unpublished MBA project, UON; 2013.

Adhiambo R, Okelo MS, Ojera PB. Literature Review on the Relationship Africa Region. Volume 3 of Mediterranean report Geneva: ILO; 2013.

GOK. Kenya Economic Survey Highlights; 2009.

Kenya National Bureau of Statistics. Economic survey and highlighs. Nairobi; 2012.

WEF Report.
Available: www.wef.coke
(Accessed on 20th June, 2015)

Mburu C, Guyo W. Influence of women enterprise fund on the growth of women owned enterprises in Kenya: A case study of Dagoretti North constituency in Nairobi. International Journal of Social Sciences Management and Entrepreneurship. 2015;2(1):185-201,

Kiraka RN, Kobia M, Katwalo AM, Oliech D. Micro, small and medium enterprise growth and innovations: A case on the performance of the women enterprise fund in Kenya; 2012.

Omaywa BT, Muturi WM. Factors affecting loan repayment by women entrepreneurs: A case of Kisii County, Kenya. International Journal of Economic, Commerce and Management. UK. 2015;3(4).

Osoro K, Mokoro A, Nyamoyo D, Areba J. Constrains Facing Women Owned Enterprises. International Journal of Social Sciences and Entrepreneurship. 2013;1(5): 351-371.

Momanyi RM, Muturi D, Munene EC. Effects of social-economic factors on growth of butchery enterprise in Nyamira Town, Kenya; 2014.

Mutai E. Economy: Women fund fails to hit target despite 7bn loaned out. Business Daily, Monday; 2018.

Kenya Vision 2030. A Globally Competitive and Prosperous Kenya; 2007.
WEF Report
(Accessed on 1st April, 2019)

Kombo KD, Tromp DLA. Proposal and thesis writing - An introduction. Paulines Publication Africa, Nairobi Kenya; 2006.

Barney JB. Firm resources and sustained competitive advantage. Journal of Management. 1991;17(1):99-120.

Barney JB, Clark DN. Resource based theory: Creating and sustaining competitive advantage. Oxford University Press; 2007.

Mahoney JT, Pandian JR. The resource based view within the conversion of management. Strategic Management Journal.1992;15(5):363-380.

Black JA, Boal KB. Strategic resources: Traits, configurations and paths to sustainable competitive advantage. Strategic Management Journal. 1994; 15(52).

Grant RM. The resource based theory of competitive advantage: Implications for strategy formulation; 1991.

Russo MV, Fouts. Resources-based perspective on corporate environmental performance and profitability. Academy of Management Journal. 1997;4:534-559.

Barney JB. Gaining Competitive Advantage. 4th Edn, Harlow: Pearson Education Limited; 2011.

Foss NJ. Entrepreneurship in the context of the resource based view of the firm. SMG Working Paper No.8/2011; 2011.

Alvarez S, Busenitz LW. The entrepreneurship of resource based theory. Journal of Management. 2001;27(6).

Porter ME. The competitive advantage of nations. New York, Free Press, Macmillan; 1990.

Nothanagel K. Empirical research within resource based theory. A meta analysis of the central proportion: Springer science and business media. 2008;1-308.

Mayabi HK. Effect of access to credit on growth of small and micro enterprises in Kenya: Case of boutiques in nairobi central business district. Published Thesis, University; 2015.

Ojeifo SA. The paradox of poverty in Nigeria: What an irony. Research Journal of Finance and Accounting. 2014;5(4).

International Finance Corporation. Women owned SMEs: A business opportunity for institutions. A market and Credit Gap Assessment and IFC’s Portfolio Gender Baseline; 2014.

Vani SK. Women’s empowerment and microfinance an Asian perspective study: IFAD warnings Wall Street Journal. Keynes, UK: Open University; 2011.

Ogbe AA. Relationship between micro finance banks and financing of small scale enterprise in Lokongoma District of Kogi State, Nigeria. Research Gate; 2013.

Annim SK. Microfinance efficiency: Tradeoffs and complementarities between the objectives of microfinance institutions and their performance perspectives. European Journal of Development Research. 2012;24(5):788-807.

SMEDAN & NBS. Survey report on Micro, Small and Medium Enterprises (MSMEs) in Nigeria. 2010 National MSME collaborative survey. Collaboration between National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria; 2012.

Deutsche Bank Research. Nigeria: The no. 1 african economy. Research on emerging markets (Oliver Masetti). Deutsche Bank Research; 2014.
[ISSN 2193-5963]
NBS. Economic Survey; 2012.
(Accessed 20th April 2019)

Maenge JO, Otuya WI. A critical review on micro financing of small businesses in Kenya. Pyrex Journal of Business and Finance Management Research. 2016;2 (2):006-011.

Prah S. Microfinance credit facilities and growth of small and medium scale enterprise in the cape coast metropolis of Ghana. International Journal of Economics, Commerce and Management. 2014;6(12).

Gyimah P, Boachie WK. Effect of Microfinance Products on Small Business Growth: Emerging Economy Perspective. Journal of Entrepreneurship and Innovation. 2018;5(1).

International Finance Corporation Scaling Up SMEs and Access to Financial Services in the Developing World. G 20 Seoul Summit; 2010.

UNDP. Micro and small enterprise development for poverty alleviation in Thailand: International best practice in micro and small enterprises development work. Paper No.2, Edited by Gerry Finnegan; 2000.

Welter F. Sustainable microfinance: The balance between financial sustainability and social responsibility. Edamba Summer Academy, Soreze, France; 2010.

International Finance Corporation. Scaling Up SMEs Access to Financial Services in the Developing World. World Bank Group; 2010.

Khanam D, Moiuddin M, Weber O. Financing micro entrepreneurs for poverty alleviation: A performance analysis of micro finance services offered by BRAC, ASA and Proshika from Bangladesh. Journal of Global Entrepreneurship Research; 2018.

Gathogo KP. The effect of microfinance institutions on growth of small scale enterprises in Kiambu County. Published Master’s Project; 2014.

World Bank Report. Understanding poverty: Small and medium enterprises finance. IBRD-IDA; 2019
Available: www.wolrdbank
(Accessed on 1st November 2019)

Gonzalez A. How does gender affect the participation of SMEs in International trade? International Trade Centre; 2016.

Ferdousi F. Impact of microfinance on the sustainable entrepreneurship development. An open Access Journal. 2015;2(1).

KIPPRA. Growth, poverty and income inequality in Kenya: Suggested Policy Options. Kenya institute of public policy and research analysis, Nairobi, Kenya; 2010.

Sultana S, Momen MA, Hassan MK. Online marketing in Bangladesh: A distinctive study in the context of some selected click and mortar business: Journal of Business and Technology. 2010; 5(2):150-165.

Olowale F, Garwe D. Obstacles to growth of new SMEs in South Africa: A case of principal component analysis approach. Africa Journal of British Management. 2010;4(5):729-738.

Kisaka SE, Mwewa MN. Effects of micro credit, micro savings and training on growth of SMEs in Machakos County, Kenya. A Research Journal of Finance and Accounting; 2014.

Sivchou T, Sokhak P, Nara M, Bunhor L. Impacts of micro-credit on household economics. IJERD– International Journal of Environmental and Rural Development. 2011;2–1.

Idowu A, Salami AO. Impact of microfinance bank on standard of living of in Ogbomoso North Local Government of Oyo State, Nigeria. Journal of International Business Management. 2011;5.

Ademu W. Finance for the poor: An Assessment of the Performance of Microfinance Institutions in Nigeria; 2012.

Aremu MA, Adeyemi SL. Small and medium scale enterprises as a survival strategy for employment generation in Nigeria. Journal of Sustainable Development. 2011;4(1):200-206.

Adewale AA, Afolabi B. Nigeria deposit money banks’ credit administration and the incidence of bad loans: An empirical investigation. Babalola: Afe Babalola University; 2010.

Salman AY, Oyebiyi GT, Emenike OA. Influence of financial inclusion on small and medium enterprises growth and development in Nigeria. International Journal in Management and Social Sciences. 2015;3(4):390-401.

Culpeper. The role of G20 in enhancing financial inclusion. Heinrich Boll Stiftung publication; 2012.

CBN. Amended revised regulatory and supervisory policy and guidelines for microfinance banks in Nigeria. Published by the Central Bank of Nigeria; 2012.

Turana OJ. Lack of access to credit stunts growth of SMEs. Business Daily; 2010.

International initiative for impact evaluation. Effects of microcredit on women’s control over household spending. A 4 Systematic Review; 2013.

Thuku GA. Factors affecting access to credit by small and medium enterprises in Kenya: A study of agriculture sector in Nyeri County. Published MBA Project; 2017.

ILO. Factors affecting women entrepreneurs in micro and small enterprises in Kenya, Addis Ababa: ILO Regional Office for Africa; 2008.

Kung’u GK. Factors influencing SMEs to finance: A case study of Westland divison, Kenya. Published MBA Thesis; 2011.

Desta S. Desk review of studies conducted of women entrepreneur in Ethiopia. Swedish International Development Corporation (SIDA); 2010.

World Bank. World Development Indicator Database; 2006.

Government of Kenya. Session paper no 2 of 2005 on development of SMEs, Nairobi, Government printer.
(Accessed on 10th October, 2015)

Milford B. Microfinance as a development and poverty reduction policy: Is it everything it’s cracked up to be? ODI Research Fellow; 2011.

Muguchu M. Relationship between access to credit and finance performance of small and medium enterprises in Nairobi, Kenya. MBA project, University of Nairobi; 2013.

Agba AM, Ocheni S, Nkpoyen F. Microfinance credit scheme and poverty reduction among low income workers in Nigeria. Journal of Good Governance and Sustainable Development in Africa. 2014;2 (1):1-13.

Olowe FT, Moradeyo OA, Babalola OA. Empirical study of the impact of microfinance bank on small and medium growth in Nigeria. International Journal of Academic Research in Economics and Management Science. 2013;2(6).

Babagana SA. Impact assessment of the role microfinance banks in promoting small and medium enterprise growth In Nigeria. International Journal of Economic Development Research and Investment. 2010;1(1):42-53.

Ogunrinola O. Social capital land earning distribution among female micro entrepreneurs in rural Nigeria. African Journal of Economic and Management Studies. 2011;2(55):94-113.

Babajide A. Effects of Microfinance on Micro and Small Enterprises, SMEs, Growth in Nigeria. Asia economic and Financial Review. 2012;2(3):463-477.

Nwosu EO, Antony OI, Vivian N, Nwankwo UC. Is there Discrimination against Women Entrepreneurs in Formal Credit Market in Nigeria? 2015.

Emmanuel SA, Nneji ID. Contribution of microfinance banks to the development of small and medium scale enterprises in Nigeria. Research Journal of Business Theory and Practice. 2015; 3(2): 139-158.

Dichter T. Hype and hope: The worrisome state of the microcredit movement; 2006.

(Accessed on 20th June 2015)

Kevany S. Debt trends in Peru’s personal, microfinance sectors spark’, Warnings Wall Street Journal. Keynes, UK: Open University; 2010.

Cain P. Microfinance Meltdown in Bosnia’, Al Jazeera (English); 2010.

Ghokale K. As microfinance grows in India, so do its rivals’. Wall Street Journal. Thesis, Universidad Austral De Chile, Chileglobal Economy: Towards a More Responsible and Inclusive Globalization; 2009.

Lawal JO, Omonona BT, Ajani OIY, Oni OA. Effects of social capital on credit access among cocoa farming households in Osun State, Nigeria. Agricultural Journal. 2009;4(4):184-191.

La Porta R, Shleifer A. The unofficial economy and economic development. Brookings Papers on Economic Activity (fall); 2008.

Bateman M. Microfinance as a development and poverty reduction policy: Is it everything it’s cracked up to be? Overseas Development Institute, a Background Note; 2011.

Kothari C. Research methodology: Methods and techniques. 2nd edition; New Age International Publishers, New Delhi, India; 2014.

Kumar R. Research Methodology: A step by step guide for beginners (2nd Ed.) New Delhi: Sage Publication; 2014.

Gupta S. Statistical methods. Sultan Chand & Sons Publishers, New Delhi. 2008.

Mugenda OM, Mugenda AG. Research methods: Quantitative and qualitative approaches. Act Press, Nairobi; 2012.

Sekaran U, Bougie R. Research methods for business: A skill building approach. West Sussex, UK: John Wiley & Sons Ltd; 2010.

Sekaran U, Bougie R. Research methods for business: A skill building approach. West Sussex, UK: John Wiley & Sons Ltd; 2010.

Cooper DR, Schindler PS. Business research methods. 8th edition, MacGraw-Hill Irwin, Boston; 2003.