An Investigation into Challenges Facing Performance of Women Enterprise Fund in Kisumu Town East Constituency, Kenya

Abstract

Women Enterprise Fund (WEF) was introduced to promote economic empowerment of women by providing alternative financial services. Loan repayment rate of Kisumu town East Constituency declined from 128% to 118% between September, 2012 and April, 2013 and from position 9 to 23 respectively. During this period the highest repayment rate was 157% and 152% respectively. Previous studies have not looked at preference of WEF as a source of funds, loan repayment rate of Kisumu Town East Constituency against other constituencies with higher repayment rate and its declining repayment rate. Studies on utilization of WEF funds as well have not included financial intermediaries to their target populations. This research therefore investigated the extent to which WEF is a preferred source of finance, extent to which WEF loans were being repaid, factors that affected utilization of WEF loans and factors that affected repayment of WEF loans. Entrepreneurship Innovation theory anchored the study. Kisumu Town East Constituency was selected because it was convenient to the researcher and also due to the ~. distribution channel of WEF. Descriptive research design was used in the study. The target population consisted of257 groups between the years May 2009 to April 2013, 10 credit officers from financial intermediaries and 1 WEF staff. Census was carried out to collect data. Data were collected through questionnaires and interviews. Validity test revealed respondents' knowledge of the tools, while Cronbach's Alpha reliability coefficient was 0.=.760 for women preference; loan repayment was 0.=850 and for loan utilization 0.=.756, meaning items tested were reliable. Data.were analyzed using descriptive statistics using mean, mode and median and presented in percentages, tables and graphs. The study found-that 63.l6% of the respondents highly preferred WEF as a source of funds and 95.95% of loans were being repaid well. Insufficient funding, training, small.loan amount, security, leadership problems and econo~y had a mean value above 3.0 implying they greatly influenced utilization of WEF funds. Economy, lack of strong legal framework of Constituency Women Enterprise Scheme and lack of individual choices in group lendingwere found to have the most influence on loan repayment rate as they had a mean value above 3.0. The study concludes that WEF is a preferred source of funds with a high repayment rate. The study recommends increased loan amounts, standardization of training and improved security. It's hoped that the findings of this study will contribute to the performance information ofWEF.