INFLUENCE OF FINANCIAL INCLUSION ON THE GROWTH OF SMALL AND MEDIUM ENTERPRISES IN KIBERA SLUMS, NAIROBI COUNTY, KENYA
Abstract
The general objective of this study was to analyze the influence of financial inclusion on the growth of small and medium enterprises in Kibera slums. Specifically, the study sought to establish the effect of Financial Usage, Financial Access, Financial Credit Availability, and Financial Quality on the Growth of SMEs in Kibera Slums. The analysis adopted a descriptive research design. The study population was all the 1287 registered SME owners. The sample was the owners of 362 SMEs. The study utilized primary data that was collected using structured questionnaires. Data was then analyzed using descriptive statistics (mean and standard deviation), correlation analysis, and regression analysis. The SPSS software version 25 was used to analyze the data. The study issued a total of 400 questionnaires to the owners of the SMEs to be filled. Only a total of 362 were picked by the researcher after a period of one week of issuing. Financial quality had an aggregate mean score of 3.556 and a mean spread of 1.034, financial credit availability had an aggregate mean score of 3.538 and a spread of 1.000, financial accessibility had an aggregate mean score of 4.189 and a spread of 1.140, financial usage had an aggregate mean score of 3.892 and a spread of 0.982 with the growth of SMEs having an aggregate mean score of 3.981 and a spread of 0.897. Since there was a significant correlation, then whenever there was an increase in financial accessibility, financial credit availability, financial usage, and financial quality there was also a related and adjacent increase in the Growth of SMEs in Kibera Slums. The adjusted R square for the model was 0.654. The model used was reliable (a good fit for data) as supported by 218.32 F statistics and a p-value of 0.000<0.05. For the regression coefficient, with all factors held constant, an increase of a unit of financial accessibility, financial credit availability, financial usage, or financial quality would increase the growth of SMEs in Kibera Slums by .493, .509, .770 or .584 respectively. This study concluded that financial accessibility, financial credit availability, financial usage, or financial quality influence the growth of small and medium enterprises (SMEs) in Kibera slums. The study recommends that the government, especially the county government should ensure that there is ease of access to credit to SMEs as most of them are affected by a lack of collateral
Keywords: Small Enterprises, financial literacy, financial access, financial quality, financial usage
CITATION: Kang’ethe, A. N., & Njeru, A. (2024). Influence of financial inclusion on the growth of small and medium enterprises in Kibera Slums, Nairobi County, Kenya. The Strategic Journal of Business & Change Management, 11 (4), 930 – 952. http://dx.doi.Org/10.61426/Sjbcm.v11i4.3130
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DOI: http://dx.doi.org/10.61426/sjbcm.v11i4.3130
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