Influence of Government Sponsored Enterprise Funds-Credit Services on the Growth of Group-Based Micro and Small Enterprises in Kenya

Abstract

The purpose of this study was to analyse the influence of Government Sponsored Enterprise credit services on the growth of group-based Micro and Small Enterprises in Kenya. The study was anchored on Resource based theory and Entrepreneurial orientation theory. A concurrent triangulation mixed methodology design was adopted for this study. The target population comprised of 51 officers from Government Sponsored Enterprise Funds and 600 group leaders of group based Micro and small Enterprises who are beneficiaries of Youth Enterprise Development Fund, Women Enterprise Funds and Uwezo Fund in Nairobi County since 2013. The study used proportionate stratified random sampling for the group based enterprises and census for Government Sponsored Enterprise Funds officers. The study Sample size of 240 leaders of group based enterprises was calculated using Yamanes formula and a census of 51 officers of Government Sponsored Enterprise Funds. The study collected primary data using questionnaires and interviews. The study used both qualitative and quantitative statistics. Qualitative data was analyzed thematically along the study objectives and presented in narrative and verbatim form while quantitative data was analyzed using descriptive and inferential statistics. The descriptive analysis included mean, frequencies, percentages and standard deviation while the inferential analysis undertaken was simple linear regression to establish the relationship between credit services and the growth of Micro Small Enterprises. It also assessed the mediating role of group characteristics on the relationship between credit services and the growth of Micro and Small Enterprises in Kenya. Quantitative data was presented using tables. The study found that credit services have a significant influence on the growth of group-based MSEs in Nairobi County, Kenya. Group characteristics partially mediate the relationship between credit services and MSE growth. The study recommends increasing funding limits, empowering group leaders, aligning fund requirements with group-owned enterprises, and developing policies that recognize their unique needs.