Abstract:
Finance has been identified in many business surveys as the most important factor determining
the survival and growth of small and medium sized enterprises in both developing and
developed countries. Despite their dominant numbers and importance in job creation, SMEs
traditionally have faced difficulty in obtaining formal credit or equity. For example, maturities of
commercial bank loans extended to SMEs are often limited to a period far too short to pay off
any sizeable investment. This study will investigate the effects of Microfinance Institutions on
the growth and development of SMEs in Kenyan rural areas. The study will be specifically
carried out in Jua Kali industry in Eldoret to represent the SMEs trading. The study will sought to
establish the effects of MFIs on the growth and development of SMEs; establish the sources of
finance for the SMEs and investigate the constraints to the growth of SMEs. The study will
adopt a non-experimental survey research design. Data will be collected using a structured
questionnaire administered to 30 SME. Interview will guide administering to the staff of the
SMEs .Interviews and observation will be carried out effectively. Data obtained will be
processed and analyzed using SPSS.
