INFLUENCE OF COMMERCIAL BANKS' CAPACITY BUILDING LENDING STRATEGY ON GROWTH OF MSES IN KENYA

Authors

  • Dr. Jane Karambu Kathuku Jomo Kenyatta University of Agriculture and Technology
  • Dr. Patrick Karanja Ngugi Jomo Kenyatta University of Agriculture and Technology
  • Dr. Willy Mwangi Muturi Jomo Kenyatta University of Agriculture and Technology

DOI:

https://doi.org/10.47941/jbsm.62

Keywords:

capacity building, growth, SMEs

Abstract

Purpose: The purpose of the study was to establish the influence of commercial banks' capacity building lending strategy on the growth of SMEs in Kenya.Methodology: The researcher used purposive sampling to select respondents. The sample size was comprised of 352 respondents. The study used questionnaires to collect data from the field. Both quantitative and qualitative data gathered was coded and analyzed using Statistical Package for Social Sciences (SPSS) computer software. Descriptive statistics was used to analyze the data in frequency distributions and percentages which were presented in tables and figures. Inferential statistics were used to analyze qualitative data.

Results: The study found out that commercial banks' capacity building have a positive and significant effect on MSEs growth. (r=0.656, p=0.001).

Unique Contribution to Theory, Practice and Policy: The study recommends for commercial banks to train their employees on how to handle clientele needs. Commercial banks need to embark on major training programmes and address their efforts to professionalize SME account managers. In fact, bank staffs dealing with SMEs need a sound knowledge of entrepreneurs and their businesses in order to develop an affinity with their clients and offer them solutions adapted to their needs. The actions which banks need to take include a better selection of new account managers for SMEs. They need to look for candidates with an adequate background and experience in small business or with entrepreneurial skills, who can be flexible and sensitive to SMEs issues.

Downloads

Download data is not yet available.

Author Biographies

Dr. Jane Karambu Kathuku, Jomo Kenyatta University of Agriculture and Technology

post graduate

Dr. Patrick Karanja Ngugi, Jomo Kenyatta University of Agriculture and Technology

Lecturer

Dr. Willy Mwangi Muturi, Jomo Kenyatta University of Agriculture and Technology

lecturer

References

Beck, T, Demirguc-Kunt, A & Maksimovic, V. (2012). Financing Patterns Around the World: The Role of Institutions. World Bank Policy Research Working Paper, 2905. Washington, D.C: The World Bank.

Braverman,A. and J.L. Guash.(2006), "Rural credit markets and institutions in

developing countries: Lessons for policy analysis from practice and modern theory",

World Development, Vol.14, and no.10/11: 1253-67.

Calice, P., Chando, V., & Sekioua, S. (2012). Bank Financing to Micro and small enterprises in East Africa: Findings of a Survey in Kenya, Tanzania, Uganda, and Zambia. Working Paper No. 146. African Development Bank Group. Office of the Chief Economist.

Mwania, M. (2011). The effect of Biashara Boresha Loan on Performance

of Micro and Small enterprises owned by KCB Ruiru branch customers.

Ngugi, R. (2001). An Empirical Analysis of Interest Rate Spread in Kenya, AERC Research Paper 106. Nairobi: African Economic Research Consortium (AERC)

Republic of Kenya (2012). The Micro and Small Enterprises Act. Nairobi, Kenya: Government Printer.

Republic of Kenya (2013). Economic Survey for 2012/13. Nairobi: Kenya National Bureau of Statistics.

Republic of Kenya (2014). Micro and Small Enterprises Authority. Information available on the official website of the Authority at http://www.mseauthority.go.ke/ accessed on 26/2/2015.

Stephanou, C. and Rodriguez, C., (2008). Bank Financing to Small- and Medium-Sized Enterprises (MSEs) in Colombia, World Bank Policy Research Working Paper 4481. The World Bank, Washington DC

Downloads

Published

2017-02-06

How to Cite

Kathuku, D. J. K., Ngugi, D. P. K., & Muturi, D. W. M. (2017). INFLUENCE OF COMMERCIAL BANKS’ CAPACITY BUILDING LENDING STRATEGY ON GROWTH OF MSES IN KENYA. Journal of Business and Strategic Management, 2(1), 20–34. https://doi.org/10.47941/jbsm.62

Issue

Section

Articles