Strategies for Accessing Credit by Small and Medium Enterprises

Abstract

Strategies for Accessing Credit by Small and Medium Enterprises by Henry Jefferson Ogoi MBA, Saint Leo University, 2013 BSBA, Colorado Technical University, 2012 Doctoral Study Submitted in Partial Fulfilment of the Requirements for the Degree of Doctor of Business Administration Walden University August 2016 Abstract Small and medium enterprise (SME) business owners play a significant role in the Kenyan economy as they account for approximately 78% of total employment and 57% of the new jobs created. The purpose of this qualitative multiple case study was to explore what strategies some Kenyan SME business owners used within the past 5 years to access credit to improve company profitability and growth. The target population consisted of 4 SME owners of businesses located in Kakamega Town, Kenya, who have had access to credit within the past 5 years. The conceptual framework for this study was the social capital theory. Semistructured interviews were conducted and company documents were gathered. All interpretations from the data were subjected to member checking to ensure the trustworthiness of findings. Based on the methodological triangulation of the data collected, 4 themes emerged after the data analysis: (a) group lending, (b) information access, (c) education and professional background of the entrepreneur, and (d) effect of access to credit on the performance of SMEs. The application of the findings from this study may contribute to social change by providing insights and strategies for SME business owners to access credit and ensure sustainable business growth that could potentially enhance community standards of living.Small and medium enterprise (SME) business owners play a significant role in the Kenyan economy as they account for approximately 78% of total employment and 57% of the new jobs created. The purpose of this qualitative multiple case study was to explore what strategies some Kenyan SME business owners used within the past 5 years to access credit to improve company profitability and growth. The target population consisted of 4 SME owners of businesses located in Kakamega Town, Kenya, who have had access to credit within the past 5 years. The conceptual framework for this study was the social capital theory. Semistructured interviews were conducted and company documents were gathered. All interpretations from the data were subjected to member checking to ensure the trustworthiness of findings. Based on the methodological triangulation of the data collected, 4 themes emerged after the data analysis: (a) group lending, (b) information access, (c) education and professional background of the entrepreneur, and (d) effect of access to credit on the performance of SMEs. The application of the findings from this study may contribute to social change by providing insights and strategies for SME business owners to access credit and ensure sustainable business growth that could potentially enhance community standards of living. Strategies for Accessing Credit by Small and Medium Enterprises by Henry Jefferson Ogoi MBA, Saint Leo University, 2013 BSBA, Colorado Technical University, 2012 Doctoral Study Submitted in Partial Fulfilment of the Requirements for the Degree of Doctor of Business Administration Walden University August 2016 Dedication I dedicate this dissertation to my family. Profound gratitude to my loving parents, Stephen and Angelina for their sacrifice to make me what I am today. I dedicate this work and give special thanks to my fiancee, Joyce Makena. Thank you for your love, moral support, and encouragement throughout my doctoral journey. You have been a source of inspiration to me. Acknowledgements I would like to thank my Chairperson, Dr. Beverly Muhammad, for her encouragement, guidance, mentorship, patience and support during this process. I would also like to extend my thanks to my committee member, Dr. Lynn Szostek, and URR member, Dr. Jamie Patterson, for their guidance, inspiration, and support. You have both helped to sharpen my skills as a researcher as well as develop a qualitative doctoral study. Also, I would like to thank Dr. Freda Turner, Program Director, and Dr. Fred Walker, Doctoral Study Administrator, for their pragmatic leadership in the Doctor of Business Administration program. Your guidance and excellent mentorship have significantly contributed to my ultimate success.