Effect of Credit Services on Investment Growth of Jua Kali Enterprise in Kenya; Case Study of Narok Town

In Kenya the Jua Kali sector contributes to the growth of the national economy significantly by creating employment and poverty reduction by giving basic needs to the needy. The sector faces a lot of challenges like luck of awareness, motivation and empowerment. Financial challenge is the main hindrance to the Jua Kali sector’s growth across the world. The Kenyan Government has developed institutions to help the sector grow. One worth mentioning is the Kenya Industrial Estate (KIE) which offers financial support and rural industrialization. Despite this effort, there was no significant growth in the sector. Therefore, this study was conducted with the aim to shade light on effect of credit services on investment growth of Informal sector in Narok Town. The study adopted a survey research design targeting licensed Informal sector proprietors and credit officer in Narok town. . The study used a sample size of 171 respondents calculated from a population of 300 licensed Jua Kali proprietors. Then data was analyzed both qualitatively and quantitatively using SPSS and in line with the study objectives. The study concluded that business growth is influenced by the financial policy in place. In Jua Kali sector, the Interest imposed on loans, the repayment period, the Inflation (cash value) influences the growth rate of any business. Moreover, the study found out that financial access, economic growth and prompt loan repayment are also some of the effects of credit availability on growth of Jua Kali industry. Legal frameworks guarding how business men obtain loans forms part of the effects of interest rates to the growth and performance of Jua Kali sector. Informal sector provides employment even to the highly educated. Obtaining Credit facilities has direct proportion on business growth on the Jua Kali sector. The study recommends that; Lending institutions should always prescribe minimum loan requirement and proper policies to enhance on loan accessibility to Jua Kali Industry. Government should put in place proper policies to curb the challenge of inflation, high interest charged by bank institution to enhance Informal sector loan accessibility. Informal sector should enhance proper record keeping of information to putting in place proper management techniques in order to increase their chances of accession loans. Informal sector should always enhance account monitoring to enhance their chances of accessing loans. The government through the Youth & Women Fund, to train the Jua Kali Proprietors on basic financial aspects to enhance productivity and growth.