Factors Hindering Credit Disbursement to Women by Deposit Taking Micro-Finance Institutions in Machakos Town

Abstract

A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Masters in Business Administration (MBA)The purpose of the study was to determine the factors hindering women from accessing credit facilities offered by micro-finance institutions. The research was guided by the research questions as follows: How do institutional, legal and regulatory frameworks affect access to credit by women in Kenya? How do socio-cultural factors affect access to credit by women in Kenya? What strategies can be adopted by financial institutions in Kenya to enhance access of credit by women? The study was conducted in Machakos, Kenya as an emerging market where a descriptive research design was adopted. The study population consisted of 4 Deposit Taking Micro Finance Institutions (DTMFIs). A total of 55 respondents who are the employees of various DTMFIs within Machakos were issued with structured questionnaires. After all the data was collected, data cleaning was carried out and analyzed using quantitative techniques. Graphs, tables and pie charts were used to present frequencies and percentage while tables were prepared using each variable or indicator. The study findings revealed that there exists a significant relationship between institutional, legal and regulatory framework and women access to finance. The study also revealed that there is a positive significant relationship between socio cultural factors and women access to credit in Kenya. This implies that indeed women access to credit in Kenya is largely influenced by socio cultural factors. The study further established that the following strategies have been used by Micro Finance Institutions (MFIs) to enhance access to credit by women. These strategies include eencouraging group formation, investing in marketing activities including advertising, personal selling, continuous innovation and development of new products, networking and collaborating with other DTMFIs to capitalize on operational synergies, unchanging product portfolio, easing the process of account opening will attract more women to seek credit, research and development will help introduce new products which will attract more women seeking credit and finally encouraging Insider Lending and Client Education will avail more funds for women seeking credit. The study recommends the need for MFIs to act in a manner that ensures that indeed the collection of data relating to women ventures as well as the creation of gender- sensitive indicators which can easily be accessed while also be used when it comes to information on the new initiatives notwithstanding the assessment as well as monitoring and evaluation of the progress made. Additionally it is important for MFIs to promote collaboration across sectors working when it comes to integrating a gender- sensitive approach in their work, in order to create a platform that enables them to share data, experiences and lessons learned, making these efforts smoother, stronger and sustainable. The study further recommends that people need to be encouraged to be able learn how to write business proposal so as to be able to access credit. A study focusing on the MFI sector where very high levels of diversity are likely to be experienced would bring out a new dimension on the factors hindering women access to credit. Future studies may also cross-sectional research design for firms in other sectors of the economy which would further add value in understanding of the concept under study