Credit Finance And Survival Of Small Business In Kenya: A Case Study Of Traders In Nairobi City

ABSTRACT

This study sought to investigate the effects of the availability of credit finance on the survival of

small businesses in Kenya. The study also sought to establish whether or not basic prerequisites

conducive for establishment of a vibrant financial services sector as alternative financer of SMEs

do exists in Kenya. The objectives of the study were to; establish the causes of lack of credit

finance to SMEs in Nairobi City, to find out other factors that affect the survival of SMEs in

Nairobi City.

The findings of the research were that the causes of lack of credit to small and medium business

in Nairobi City which include inadequate education and skills, technological change, lack of

managerial training and experience among others. Other factors that affect the survival of SMEs

in Nairobi City which include taxation, poor market, management problems, poor record

keeping, wrong pricing among others. The policy measures that can be implemented to ensure

the survival of small and medium business in Nairobi City which include access to land and

premises, access to credit, marketing assistance, coordination of activities and awareness creation

among others.

The research concluded that microfinance played a vital role towards development of small and

medium businesses in Nairobi City.

Based on the research findings the following were recommended, all stakeholders of local

economic development including donors, government organisations, NGOs and private

sector should strive together to have an overall strategy for improving the BDS market

development interventions.

Hence, all interventions in supporting MSEs should be designed based on the new BDS market

development principles.

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