The Role Of Table Banking On Economic Empowerment Of Women A Case Study Of Othaya Sub-County.

Abstract

This study evaluates exactly how table banking affects economic empowerment of table banking groups. The failure of specialized financial institutions to address and meet the credit needs of the poor and the very poor entrepreneurs and women in particular has resulted into popularity of informal banking groups in most of the developing countries (Marti & Mair, 2009). Table banking typically refers to a group funding where members pool their savings together and borrow immediately from those savings on the table for a short period or for a long period (Brannen 2010). (Ahlen, 2012) asserts that table banking takes a model of the Grameen Bank of Bangladesh and the village savings and loan schemes of Zanzibar. In Sub- Saharan Africa, it is observed that majority of the women entrepreneurs have benefitted from the village savings and credit associations which offer credit at affordable and flexible interest rates in form of a community banking model rather than the table banking model (Anderson , 2012). Community banking model has benefitted many microenterprises due to the ease of access to credit form the village savings and credit associations.Table banking is a concept that has gained popularity in the recent past in Kenya. The aim of this kind of banking is to enhance the economic status of citizens particularly those from poor areas of the country. Poverty has been an issue in less developed areas partly due to the high interest rate that is imposed on the loans by financial institutions. Economic disempowerment not only affects development of the affected areas but directly deplores the livelihoods of millions of Kenyans who are disadvantaged relative to accessibility of financial services from the mainstream institutions. It was, therefore, fundamental to evaluate the effect of table banking on economic empowerment of table banking groups. The study was conducted in Othaya Sub-County. It was guided by three specific objectives which examined how group cohesiveness, credit access and group guarantee affected economic empowerment of the said groups. Primary data was collected through self-administered questionnaires that were closed ended to ensure accuracy in information flow. The study revealed that Table Banking had increased ease of access of credit for micro and small enterprises who didn’t qualify for credit from formal financial institutions. It also revealed that Table Banking groups are lacking in capacity building, technology transfer and market linkages of the members. The study adopted descriptive research design. It targeted the … members of registered table banking groups. A sample of … respondents was obtained from the target population using stratified random sampling method. A structured questionnaire was used to collect data. The Statistical Package for Social Sciences software facilitated data analysis. Both descriptive and inferential statistics were used in analysis. The study findings were presented in form of tables. However, it was evident that social capital was a key component of Table Banking with mentorship, accountability and loan guarantee being the major benefits brought out by the respondents. Challenges of being in such groups were also not lacking, the major ones being non-serious members and loan defaulting. Nevertheless, 95% of the table banking members involved in this study confidently said that their businesses had grown in terms of profitability, customer base, product diversification and asset base. In fact, the study revealed that most businesses in Table Banking Groups are between 0 and 2 years and by the time they hit their 3rd year, they are slowly outgrowing the groups; at this stage, they need bigger loans and more sophisticated technologies and trainings in order to grow further. The study recommends that proper structures and policies be put in place by the Government to ensure that these groups are nurtured so well that they do not fall out of the group as they grow. The study also recommends that further research is done on how other countries run this concept and how Kenya can make the concept work better for micro and small enterprises. Keywords: Economic Empowerment, Group Cohesiveness, Group Guarantee, Credit Access, Table Banking.