Influence of joint liability on enterprise development of rural women in Nyamache Sub-County

Abstract

Group lending has received a great attention from economists and policymakers for its successful delivery of credit to poor borrowers and its role in alleviating poverty in the 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 theorized 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 mechanism on enterprise development of rural women in Nyamache sub-county, Kenya. 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 of analyzing data, and to establish relationships between variables. The study established that, joint liability, training, group representation and loan size positively and significantly influenced enterprise development. The study recommends that; women groups should be strengthened so that they can be in position to jointly access loan for the development of their enterprises, the women groups lending group should organize effectively trainings so as to equip the members with capacity to efficiently manage their business enterprises, the women lending group should share the lending policies with members to understand them foe easy of operation and to minimize misunderstanding and any arising conflict and that the women lending groups should effectively vet group members to enable them access maximum qualified amounts so as they could invest in their businesses for survival and growth.