Influence of Joint Liability on Enterprise Development of Rural Women in Nyamache Sub-County, Kisii County, Kenya

Abstract

Group lending has received great attention from economists and policymakers for its successful credit delivery to poor borrowers and its role in alleviating poverty in developing countries. The success of group lending in providing credit to poor borrowers has been attributed to its ability to mitigate the asymmetry of information and enforcement problems in credit markets. The ability of group lending institutions to overcome the asymmetry of information and enforcement problems has been theorised to be the driving force behind their outreach to the poor, their sustainability, and their repayment performance. While there is a host of theoretical models explaining the success of group lending, empirical research has lagged behind. The focus of this study was to explore the determinants of group lending mechanisms on the enterprise development of rural women in the Nyamache sub-county, Kenya. The study targeted the rural women development groups that access loans as a group within Nyamache Sub-County. The total target population comprised 781 members, and by using Krejcie and Morgan’s table of determining sample size, the sample size consisted of 260 respondents. Questionnaires were used. The questionnaires were edited first for accuracy and completeness. The study used frequency distribution and percentages and computer software-Statistical Package for Social Scientists version 22 (SPSS v 22) as a tool for analysing data and establishing relationships between variables. The study established that joint liability, training, group representation and loan size positively and significantly influenced enterprise development