Microfinance And Poverty Reduction In Selected Microfinance Instutions In Nairobi Kenya

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The purpose of the study was to show the relationship between micro finance and pove1iy

reduction and how microfinance has led to reduction of poverty in Kenya. The main or

general objective of the research was:

I. To establish the contribution of micro-finance services in pove1iy reduction in Kenya.

II. To identifY the various micro-finance services offered by micro-finance institutions in

Kenya.. To identifY the problems that hinder micro-finance services in Kenya.

The target population that was accessible was 50 out of the total population of 400 recorded

clients and staff of Nairobi branch, 44 was selected in order to achieve the required sample,

this sample was obtained using slovene's fmmula. Primary data was collected using

questionnaire method administered to staff and clients analyzed through the use of descriptive

statistics and MS Excel and data was presented using tables and pie charts. The sample

population was picked using stratified random sampling. This technique was used because it

provided for inclusion in the sample of the various sub groups in the target population.

The research instrument used were questimmaire where there these were structured and nonstructured

and they aimed at getting all the necessary data from respondents. This method

was used because it is helpful in obtaining specified quantitative and qualitative information

with accuracy and completeness, interviews where the researcher used interviews to acquire

information that was not easily obtained through questionnaires. Interviews were used

because it saves time when the interview schedules are structured and you get the first hand

infom1ation from the respondents and it enabled the researcher to probe more for

clarification, documenta1y review was also used where it involved reading documents related

to clients drop out and microfinance.

The researcher used both the questionnaire and the general objectives to analyze the data,

where he used gender that is both male and female where most of micro finance clients were

female where 61% were women and above 38% were men. This shows that the initial

objective of microfinance institutions of empowe1ing the poor and rural women for selfsustaining

and improve their standard of living, the researcher used mmital status of single,

married, window and divorced to analyze data, age group was also used, education level,

duration in the organization of staff; services offered by microfinance institutions, effect of

microfinance services on poverty reduction and problem that hinder microfinance services,

all based on questionnaire and objectives.

The findings of the study revealed that many people were helped with micro finance services

such as savings, loans, advisory services, insurance services among others. According to the

findings these services helped people of Kenya in increasing their investment in small

businesses which in tum creates their income and later will lead to a better standard ofliving.

The findings of the study also revealed that micro finance services helped people of Kenya in

reducing their level of poverty with over 74% of the respondents agreed though there a

significant proportion is living below the poverty line. The study revealed that microfinance

institution has promoted women's empowerment in the society with 75% such business and

more women become self reliant and they are in position of rum1ing their own business

independently. However, not all women have been in full position of self reliance, thus more

needs to be done since some of the women are still poor. The study also revealed that

microfinance institutions played a big role in linking their clients to the agricultural sector

with over 68% of the respondents agreed by offering them agricultural loans.

Conclusion, microfinance institutions play a major role in reducing povetiy level to a lower

level especially it helps low income households who are the most susceptible to poverty

problems. Microfinance institutions provide services that are regarded impotiant tools in

alleviating poverty such as saving services, loan services, advisory services and insurance

services. There is clear evidence that microfinance services have done a tremendous work in

uplifting people's income and their standard ofliving though there are problems facing

microfinance institutions in their bid to eradicate poverty such as people's inability to offer

collateral security, lack of knowledge of micro finance institutions by the poor and shortage of

funds that would be given to the poor.

The recommendations that were put forward where there is need for micro-finance

institutions to increase the amount ofloan they offer to the society especially the women as it

had been found out by the study that the amount given was not enough to establish viable

enterprises and promote socio-economic development, the government should provide and

maintain the basic infrastructure at reasonable cost to consumers, such as communications, education and roads, there is a need for employment progran1s, Legal and institutional

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SSA, R (2021). Microfinance And Poverty Reduction In Selected Microfinance Instutions In Nairobi Kenya. Afribary.com: Retrieved June 24, 2021, from https://afribary.com/works/microfinance-and-poverty-reduction-in-selected-microfinance-instutions-in-nairobi-kenya

MLA 8th

Research, SSA. "Microfinance And Poverty Reduction In Selected Microfinance Instutions In Nairobi Kenya" Afribary.com. Afribary.com, 04 Jun. 2021, https://afribary.com/works/microfinance-and-poverty-reduction-in-selected-microfinance-instutions-in-nairobi-kenya . Accessed 24 Jun. 2021.


Research, SSA. "Microfinance And Poverty Reduction In Selected Microfinance Instutions In Nairobi Kenya". Afribary.com, Afribary.com, 04 Jun. 2021. Web. 24 Jun. 2021. < https://afribary.com/works/microfinance-and-poverty-reduction-in-selected-microfinance-instutions-in-nairobi-kenya >.


Research, SSA. "Microfinance And Poverty Reduction In Selected Microfinance Instutions In Nairobi Kenya" Afribary.com (2021). Accessed June 24, 2021. https://afribary.com/works/microfinance-and-poverty-reduction-in-selected-microfinance-instutions-in-nairobi-kenya