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The main objective of the study was to examine the influence of Micro Finance Institutions (MFIs) on growth of Micro and Small Enterprises (MSEs) in the Coast region. The study was triggered by the thinking that lack of sufficient funds has been a serious problem and has hindered growth of MSEs.
Survey research design was used and data collection methods used were i9nterviews, observations and documentary review schedule. Instruments used were interview questions, questionnaires and documentary review guide.
Findings indicated that loans/credit offered by MFIs have an impact on sales turnover, profitability of business, capital investment, number of employees and hence, growth of small business. Findings also revealed that small business sector is dominated by people with low education levels. On the other hand, growth of MSEs does not depend largely on borrowing frequencies from MFIs, there are other factors that contribute to their growth.
Furthermore, the findings revealed that short repayment period, small loan size, bureaucracy, interest rate education, business skills and government regulations are among factors that hinder MSEs’ growth. In order to enhance MSEs quick growth, the following recommendations were put forward: increase loan size, review loan repayment period, undertake effective training to enhance entrepreneurial skills, create conducive environment for loan schemes and lastly, MFIs have to remove unnecessary bureaucracy. |
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