Aspects Influencing the Loan Uptake of Women Enterprise Funds by Small and Medium Enterprises in Thika Town, Kenya

Abstract

The study had four objectives as follows; to analyse the significance of access to information about Women Enterprise Fund on the uptake of the loans; to analyse the significance of cost of lending on the uptake of Women Enterprise Funds loans; to analysethe effect of credit rating on the uptake of loans at the Women Enterprise Fund and to establish the effect of financial literacy training on the uptake of Women Enterprise Funds. Descriptive survey design was used and a sample of 169respondents was selected by stratified random sampling from a target population of 564 women owner-managers. The study showed that lack of financial training hampers the uptake of loans by Small and Medium-sized Enterprises. In addition, high interest rates did not prevent women businesses in Thika town from accessing credit Information on available funding opportunities are not accessible to many women enterprises. The financial training literacy among women entrepreneurs in Thika Town is low and inadequate. Although lack of financial training literacy has a negative effect on access to loans, its effect was not a significant determinant of accessing Women Enterprise Funds. The cost of financing was high hence resulting into an inverse relationship with access to loans by women enterprises in Thika Town. There was little information about how to access Women Enterprise Funds among women entrepreneurs in Thika Town Credit rating among women enterprises was poor hence a negative relationship with access to Women Enterprise Funds loans. This study recommends that Women Enterprise Funds government and financial institutions should provide women entrepreneurs with financial training literacy. Women enterprises need to seek financial training before making major financial decision that could have detrimental effects on their businesses.