| dc.description.abstract | Microfinance has become very important in global poverty reduction debates. The popular
assumption is that enabling poor households access to credit helps households begin micro
entrepreneurship which would enable them improve their incomes and, eventually escape
poverty. Evidence from research so far has been scanty, and many results have been highly
contested. Studying the impact of microfinance intervention is important to assess its viability
on poverty reduction. The study focused on the impact of MFls programs at household and
enterprise levels within Kisumu Municipality. The study sought to examine the services
offered by micro finance institutions toward s economic empowerment of the poor in Kisumu
Municipality; assess the nature and change of wealth in the beneficiary households as a result of
the delivery of micro finance services; and examine the impact of micro finance on productivity of
the enterprises in the Municipality. The study population for this study composed of the
treatment group and the control group with the basic principle being to compare these two
groups along different impact indicators and to identify any differences. The target population
under the study constituted of 1,820 respondents from which a representative sample of three
hundred of eighteen. Stratified systematic sampling was used to draw 210 and 108 representative
samples from treatment and control groups respectively. The research employed the use of
applied descriptive and quantitative research design. The methodology used direct observation,
and both open and closed questionnaires distributed to the respondents within the study area.
Secondary data were also gathered from different relevant publications. The study applied
frequencies, averages and percentages as the main statistical tools. The study revealed that the
services offered by microfinance institutions to clients in Kisumu Municipality included
microcredit, savings, training, and monitoring and supervision. The study further analyzed the
impact of micro finance to the poor clients based on economic indicators at the household and
enterprise levels. The study findings revealed that microfinance programs have significantly
(p<O.OJ) improved the households' income and savings, asset ownership and housing condition
of the MFI clients in the Municipality at 95% confidence interval. Additionally, it significantly
(p<O.OJ) increased enterprises' production capacities, net profit, and employment opportunities.
However, the research findings did not show any significant impact of microfinance programs on
households' access to education and household expenditure (p?.05). The study recommended
that Microfinance Institutions should promote market segmentation to enable poor people to
acquire more assets, increase household welfare, and to better cope with vulnerability. MFls
should further support market research for designing new and varied financial products to
promote customer retention rates, client satisfaction levels and impact. The study also
recommended that MFls should establish more links with microfinance sector, academic and
research institutions to disseminate key lessons learnt in the Municipality. Therefore,
strengthening the operations and development of MFIs in Kisumu Municipality will be an
appreciated to realize the objectives of the Poverty Reduction Strategy of the Kisumu County.
The study was of great significance in highlighting the role of microfinance institutions in the
empowerment of the poor through the provision of microcredit, entrepreneurial training,
monitoring and supervision. | en_US |
