ACCESS TO MICROFINANCE AND FINANCIAL PERFOMANCE OF YOUTH SELF HELP GROUPS IN MIGORI COUNTY, KENYA.

DAVID ODHIAMBO ONYANGO, CPA HESBON N. OTINGA, PhD, DENNIS JUMAS, PhD

Abstract


The general objective of the study was to determine the effect of access to microfinance on the financial performance of youth groups‟ income generating projects in Migori County. Specifically, it sought to determine the effect of interest rates, collateral requirement, lending procedure and credit information sharing on the financial performance of youth groups‟ income generating projects in Migori County, Kenya. The study was guided by Welfarist theory, credit market theory and Joint liability theory. The study used descriptive cross sectional research design. The target population was 121 registered youth groups dealing with income generating projects in Migori County. Yamane formula was used to select 93 youth groups. Purposive sampling was used to select two persons that is the chairperson and the treasurer from each of the youth group income generating project hence the sample size of 186 participants. Data was collected using questionnaires and analyzed using descriptive statistics that include percentage, mean and standard deviation. To establish the relationship between the variables, regression analysis was used.  The results indicated that employee value proposition has significant positive effect on talent engagement. This was supported by B-coefficients Interest rates on micro-credit access β1=-0.253, P=0.000; Collateral requirement β2=0.194, P=0.000; Lending procedure β3=0.306, P=0.000; Credit information sharing β4=0.189, P=0.001. The coefficient of determination (R2) was 0.662, P=0.000 and this shows that 66.2% of the variations in the financial performance can be explained by the four predictor variables. The study concluded that access to microfinance has significant effect on financial performance of youth Self Help groups in Migori County. Therefore, the study recommended that the government and financial bodies should consider offering subsidized interest rates or low-interest loan products specifically targeted at youth Self Help groups. Financial institutions should broaden the range of acceptable collateral to include non-traditional assets like equipment or intellectual property. Financial institutions should simplify the loan application process by reducing unnecessary documentation and clarifying the requirements.

Key Words:  Interest Rate, Collateral Requirement, Lending Procedures, Credit Information Sharing 

CITATION: Onyango, D. O., Otinga, H., & Jumas, D. (2024). Access to microfinance and financial performance of youth self-help groups in Migori County, Kenya. The Strategic Journal of Business & Change Management, 11 (4), 51 – 72. http://dx.doi.Org/10.61426/Sjbcm.v11i4.3069


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DOI: http://dx.doi.org/10.61426/sjbcm.v11i4.3069

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