Effect of Credit on Micro and small Enterprises Performance in Kitale Town

Abstract

The MSEs contribution to the growth of the national economy continue to assume increasing significance especially in job creation . These enterprises are created to fulfill the primary needs of man and are formed under conditions of risk and considerable uncertainty .This sector is encumbered by many problems chief among them being financing. A number of organizations have stepped in to finance their operations and solve this problem and promote their business performance. Its in light of this that this study was carried out with the objective of conducting a study to determine the effect of credit available to MSEs on business performance in Kitale town. More specifically this research sought to establish the effect of credit on kinds of assets acquired , market share served , stock levels held in the business and number of employees added in business.. On the effect of credit available to MSEs on business performance by considering value of assets acquired on accessing credit, it was found that credit available to MSEs does not necessarily lead to addition of assets. The effect of credit available to MSEs on expanding market share, it indicated that credit availability does not guarantee a bigger market share. The effect of credit available to MSEs on business performance by considering stock levels held it revealed that little money was allocated to purchasing of additional stock. On establishing the effect of credit available to MSEs by considering additional number of employees it was found that MSEs do not necessarily lead to good performance.