Welfare effects of micro finance institutions in Kenya:

Abstract

The finance sector especially the MFIS in Kenya plays an important role in the social- economic development of the country. Its significance can be seen in terms of contribution towards economic growth, employment creation, poverty eradication and development of an industrial base. However, despite the critical role played by the sector, its faced with many challenges and constraints that include unfavorable policy environment and regulatory framework, limited clients, high rate of loan default, inadequate skills and technology and gender inequality among others. The objective of the study was to investigate. Specifically, the research was to find out whether there exists a relationship between the micro finances and the social economical welfare. The study was intended to help individual entrepreneurs, microfinance institutions, potential investor's government, as well as researchers. The study will use stratified random sampling and then apply the simple random sampling to select strata. Sixty respondents were involved in the study. Data was gathered using questionnaires. The data was analyzed using Microsoft excel and SPSS v21 software. It was then presented in tables, graphs, pie-charts and cross tabulations. Based on the analyzed data, it was seen from the Chi-square test for association that that having an account in MFIs is connected to higher benefits on the account holders. It was also seen that having an account was paramount in receiving any benefits from the MFIs.