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    Influence of Credit Risk Education on Access to Credit by Micro Enterprises in the Formal Sector in Kenya
    (2023) Karimi, Ann; Baimwera, Bernard; Miluwi, Joshua
    Access to credit from financial institutions for the purpose of financing state-regulated micro enterprises in Kenya has been largely based on personal judgment, resulting in a lack of available credit from banks and other financial organizations due to the high rate of credit default. This has severely restricted the prospects of entrepreneurs funding their enterprises. In order to address this issue, a study was conducted that investigated the influence of credit risk education on access to credit by micro-enterprises in the formal sector in Kenya. Credit risk education and access to credit were the independent and dependent variables. The study was guided by collective risk theory to hypothesize the interconnection between the variables. To accurately capture the insights of the research, a descriptive survey design was employed, with the target population being 1,215,184 formal sector micro-enterprises in Kenya recorded by the Business Registry. A sample size of 384 respondents was determined using the Cochran formula. A stratified proportionate sample technique was employed comprising eight regions in Kenya. Informed consent from respondents was acquired and confidentiality maintained in data collection. The study gathered and analyzed primary data using semi-structured questionnaires. Descriptive and inferential statistics were used from grouped data obtained from the overall Likert scale. Cronbach’s alpha was used to test reliability and factor analysis for validity. Logistic regression was applied to investigate the relationship between the study variables using advanced SPSS version 23. The results indicated that credit risk education had a positive influence on access to credit. However, the low levels of credit risk education, have hindered access to credit for financing the regulated micro-enterprises, thereby affecting the performance of the MSMEs sector. Based on these findings the study recommends that the Government of Kenya develops strategies for active engagement to promote credit risk education to enhance access to credit.
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    Influence of Credit Risk Education on Access to Credit by Micro Enterprises in the Formal Sector in Kenya
    (International Journal of Professional Practice (IJPP), 2023) Karimi, Ann,; Baimwera, Bernard; Miluwi, Joshua
    Access to credit from financial institutions for the purpose of financing state-regulated micro enterprises in Kenya has been largely based on personal judgment, resulting in a lack of available credit from banks and other financial organizations due to the high rate of credit default. This has severely restricted the prospects of entrepreneurs funding their enterprises. In order to address this issue, a study was conducted that investigated the influence of credit risk education on access to credit by micro-enterprises in the formal sector in Kenya. Credit risk education and access to credit were the independent and dependent variables. The study was guided by collective risk theory to hypothesize the interconnection between the variables. To accurately capture the insights of the research, a descriptive survey design was employed, with the target population being 1,215,184 formal sector micro-enterprises in Kenya recorded by the Business Registry. A sample size of 384 respondents was determined using the Cochran formula. A stratified proportionate sample technique was employed comprising eight regions in Kenya. Informed consent from respondents was acquired and confidentiality maintained in data collection. The study gathered and analyzed primary data using semi-structured questionnaires. Descriptive and inferential statistics were used from grouped data obtained from the overall Likert scale. Cronbach’s alpha was used to test reliability and factor analysis for validity. Logistic regression was applied to investigate the relationship between the study variables using advanced SPSS version 23. The results indicated that credit risk education had a positive influence on access to credit. However, the low levels of credit risk education, have hindered access to credit for financing the regulated micro-enterprises, thereby affecting the performance of the MSMEs sector. Based on these findings the study recommends that the Government of Kenya develops strategies for active engagement to promote credit risk education to enhance access to credit.
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    Role of digital platforms as financial literacy delivery channels for promotion of financial inclusion in commercial banks in Kenya
    (International Journal of Professional Practice (IJPP), 2022) Boldar, Joseph D.S.; Omanwa, Omanwa; Baimwera, Bernard
    Kenya features high financial services availability and accessibility. However, the usage of these services is low and it remains a challenge for full-service banks who are the suppliers and the main players for inclusion within the financial markets. Against this backdrop, this study sought to evaluate the effect of digital platforms as a channel for providing financial literacy for financial inclusion of commercial banks. The study was guided by diffusion of innovation theory. Using descriptive research design, a sample of 384 respondents was randomly selected from a target population of 10,717 management staff of commercial banks in Kenya. The data collected were analyzed using descriptive, correlation, and regression analysis. Digital platforms channels were found to significantly affect financial inclusion in commercial banks in Kenya. The study concluded that commercial banks in Kenya had leveraged on the reachable of digital platforms like websites and online portals, social media pages, and online games and courses as channels of promoting financial literacy that significantly contributed to inclusion. The study recommended that the management of banks engaged in commercial activities should ensure the ICT department has a team dedicated to providing financial literacy training using digital platforms targeting loan applicants to improve their usage of financial services. The study expanded the utility of diffusion of innovation theory, to link the relationship between digital platforms as a channel for providing financial literacy for financial inclusion of commercial banks. Most of the existing research that adopted the theory used it in a different context, hence the study contributed by developing the utility of the diffusion of innovation theory.
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    Promotion of Financial Literacy through Financial Education Partnership for Financial Inclusion in Kenya: Case of Commercial Banks
    (Journal of International Business, Innovation and Strategic Management, 2022) Boldar, Joseph.D,S.; Omanwa, Clemence; Baimwera, Bernard
    The purpose of the study was to assess the effects of financial education partnership on financial inclusion of commercial banks. The study was guided by resource-based theory to hypothesize the relationship between financial education partnership and financial inclusion. The study design adopted was descriptive and a sample of 384 was derived using stratified simple random sampling from a population of 10,717 management staff from all the branches of commercial banks in Kenya. The study collected and analyzed primary data. The data was gathered using semi-structured questionnaires. The study employed both descriptive and inferential statistics for data analysis. Correlation and regression were applied to determine the relationship between financial education partnership and financial inclusion. The findings established that financial education partnership positively and significantly predicted financial inclusion. This implied that as financial education partnership increases then financial inclusion will be increased. The study concluded that the use of financial education partnership as financial literacy delivery channel increased financial inclusion. Commercial banks in Kenya sparring used financial education partnership. The majority used a partnership with the government to promote financial literacy by conducting workshops and conferences. The study recommended that commercial banks management should adopt aspects of financial education partnership currently not used. These include financial education sponsorship, collaborating with other financial institutions, academic institutions through organizing lectures, and being involved in a nationwide campaign to promote financial literacy