Doctorate Theses and dissertation
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Item Influence of Financial Advisory Services on Access to Credit by Micro Enterprises in the Formal Sector in Kenya(KeMU, 2023-08) Karimi, Ann NjeriAccess to credit from financial institutions for the purpose of financing state-regulated micro-enterprises in Kenya has been largely based on personal judgement, resulting in a lack of available credit from banks and other financial institutions 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, this study was conducted to investigate the influence of financial advisory services on access to credit by micro enterprises in the formal sector in Kenya. The independent variables examined included financial market awareness, financial planning services, credit risk education and credit counseling services. The dependent variable of the study was access to credit, while the moderating variable was borrowing behavior. The study was guided by various theories, including rational expectation theory, agency theory, behavioral theory, collective risk theory, and theory of reason action to hypothesize the interconnection between the chosen variables. To accurately capture the insights of the research, a correlational research design was employed, with the study population being 50,043 micro-enterprises licensed by the 47 county governments within the universe of 1,215,184 Kenyan regulated enterprise. A sample size of 384 micro enterprises was determined using the Cochran formula and a probability sampling technique was employed to obtain the sample from the population. Data from the 47 counties within the 8 former administrative regions of Kenya was collected proportionately. Primary data was gathered and analyzed using structured questionnaires. The measures of dispersion were used to compute means, frequencies, and standard deviation from grouped data obtained from the overall Likert scale while inductive statistics such as logistic regression, were applied to investigate the relationship between the study variables using advanced SPSS computer software version 23. The results of the logistic regression analysis indicated that financial market awareness, financial planning services, credit risk education, and credit counseling services had a significant and positive influence on access to credit. The analysis also suggested that borrowing behavior had a significant effect on financial advisory services and access to credit. The findings suggested an important role of financial advisory services in facilitating access to credit for micro-enterprises in the formal sector. However, the low levels of financial market awareness, financial planning services, credit risk education and credit counseling services have hindered access to credit for financing the regulated micro-enterprises, thereby affecting the overall performance of the MSMEs sector. The study advises that the Government develops strategies for active engagements to promote financial market awareness, financial planning services, credit risk education, and credit counseling services to enhance access to credit. Further, licensing of more certified financial planners and inclusion of a credit counselling certification program with certified counselors in the capital markets will be beneficial. The enhancement of the MSEA’s mandate to include technical assistance and incentives to credit counseling and financial planning firms’ professionals as well as support to the micro-enterprises to offer competitive interest rates and reduce lending limitations like lengthy paperwork and high collateral requirements will be positive for access to credit. Further studies are needed to comprehend the role of gender and digital financial services in access to credit and the potential impact of the current regulatory environment on financial access and the effectiveness of government policies in increasing access to creditItem Antecedents of Technology Adoption and Financial Inclusion among Micro Enterprises in Machakos County, Kenya(KeMU, 2018-08) Mwania, Paul MutwiwaThe increased levels of mobile and internet banking has enabled the Micro Enterprises (MEs) to save, undertake transactions and access low cost credit without necessarily having security for their loans. Many micro-enterprises are not included in the mainstream financial system and hence they cannot access credit. However, with the increased level of antecedents of technology adoption (mobile and internet banking), the micro enterprises have not fully adopted this new innovation to increase their levels of financial inclusion. The aim of the study was to examine the antecedents of technology adoption (mobile and internet banking) on financial inclusion among the micro enterprises in Machakos County. The study adopted a descriptive research design since it seeks to build a profile about the relationship between antecedents of technology adoption (mobile and internet banking) to financial inclusion in Kenya. The study was targeting micro enterprises operating in Kenya with a special focus to Machakos County. Purposive sampling technique was used to select the sample for the study. Questionnaire was used for data collection as it was cost effective as opposed to other instruments. Pilot testing involved60 businesses which were not included in the final sample. To enhance validity in this study, content related validity of the questionnaire was used. On the other hand, reliability was assessed using the test-retest method and was done alongside the pilot study. The researcher selected a pilot group comprising 10% of the sample. The research instruments were tested for reliability using the split half method. This was done by collecting data from 60 respondents. Data was verified and edited for completeness and consistency. Content analysis and descriptive analysis was employed. Regression analysis was applied to establish the relationship between the variables. Regression results showed that convenience and financial inclusion are positively and significantly related (β=0.201, p<0.001). Transaction cost and financial inclusion were also found to positively and significantly related (β=-0.091 p<0.002). Perceived value and financial inclusion are positively and significantly related (β=0.233, p<0.001).Collateral and financial inclusion are positively and significantly related (β =0.154, p<0.002) while technology adoption and financial inclusion are positively and significantly related (β=0.573, p<0.001). The study further found that financial services technology innovation moderates the relationship between transaction cost, perceived value and convenience and financial inclusion of micro enterprises. The study concludes that collateral, transaction cost, convenience, perceived value and technology adoption have a positive and significant relationship with financial inclusion of micro enterprises. It was further established that mobile and internet banking have improved the access to financial services by micro-enterprises. This is seen through improved business growth among the enterprises as they can access low cost credit for business growth. The low cost of credit for the micro-enterprises has improved the level of financial inclusion. It’s recommended that owners of micro enterprises should use mobile banking since it makes it easier for them to carry out their businesses operations. According to the study, use of internet banking makes it easier for owners of micro-enterprises to carry out their businesses operations. The study recommends that owners of micro enterprises should adopt use of internet banking since it does not require a lot of technical knowledge for it is simple to use hence convenient for business owners. The owners of micro-enterprises should use mobile and internet banking to accomplish their banking tasks anytime and anywhere since it is efficient for them.