IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v7y2023i10p1956-1971.html
   My bibliography  Save this article

Effects of Loan Repayment Mechanism on Clients’ Livelihoods Sustainability: A Case of Deposit Taking Microfinance Institutions in Nakuru County, Kenya

Author

Listed:
  • Catherine Karimi

    (School of education and social sciences, St. Paul University P.O BOX Private Bag – 00217, Limuru – Kenya)

  • Dr. Paul Gesimba

    (School of education and social sciences, St. Paul University P.O BOX Private Bag – 00217, Limuru – Kenya)

  • Dr. Peter Koome

    (Department of business and leadership studies, St. Paul University P.O BOX Private Bag – 00217, Limuru – Kenya)

Abstract

The Microfinance Institutions (MFIs) clients’ livelihoods sustainability largely relies on the institutions managerial functions whose aim is to achieve the vision of poverty alleviation through encouraging the poor people to save and get loans in order to begin or enhance their small businesses thus improve their living standards as well as achieve livelihoods sustainability. The study explored the relationship that exists between deposit taking MFIs governance and clients’ livelihoods sustainability in Nakuru County, Kenya. Specifically, this study sought to establish the relationship between loan repayment mechanisms on livelihood sustainability of clients of deposit taking MFIs in Nakuru County, Kenya. The study adopted the multi-stage sampling technique whereby the MFIs were purposefully selected while the respondents were systematically sampled by the use of the nth individual. The sample size consisted of 580 MFIs clients and 10 managers out of 1,954,111 target population. The Primary data was collected through the use of questionnaires and key informant interview guides. The study utilized descriptive statistics to describe the study’s variables characteristics. Multiple regression analysis was conducted to establish the relationship between the independent and dependent variables. The Regression results indicate a positive relationship between loan repayment mechanisms and the clients living standards at 1% significant level and the Gender of the client had a significant negative impact on livelihood sustainability as related to loan repayment at 10% significance level. The study concludes that while majority of the microfinance institutions are female clients whose gender role is mainly influenced by cultural prescribed gender roles, the current gender legal right need to be sensitized in order to pave way for households’ sustainable livelihoods through improved access to productive resources. Therefore, this study recommends that the MFIs focus more on capacity building for the clients in terms of financial management and investments so as to ensure proper utilization of savings and income generated from their business. In this concern, any policy intervention should aim at, among other factors, ensuring proper financial advice to the clients to ensure that sustainable Livelihoods for the clients are attained.

Suggested Citation

  • Catherine Karimi & Dr. Paul Gesimba & Dr. Peter Koome, 2023. "Effects of Loan Repayment Mechanism on Clients’ Livelihoods Sustainability: A Case of Deposit Taking Microfinance Institutions in Nakuru County, Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(10), pages 1956-1971, October.
    • Handle: RePEc:bcp:journl:v:7:y:2023:i:10:p:1956-1971
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-7-issue-10/1956-1971.pdf
    Download Restriction: no
    File URL: https://www.rsisinternational.org/journals/ijriss/articles/effects-of-loan-repayment-mechanism-on-clients-livelihoods-sustainability-a-case-of-deposit-taking-microfinance-institutions-in-nakuru-county-kenya/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shakil Quayes, 2012. "Depth of outreach and financial sustainability of microfinance institutions," Applied Economics, Taylor & Francis Journals, vol. 44(26), pages 3421-3433, September.
    2. Jemal Abagissa, 2021. "The Assessment of Micro and Small Enterprises Performance and Challenges in Addis Ababa, Ethiopia," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 9(1), pages 8-18.
    3. Tang, Christopher S., 2006. "Perspectives in supply chain risk management," International Journal of Production Economics, Elsevier, vol. 103(2), pages 451-488, October.
    4. Eijaz Ahmed Khan & Mohammad Alamgir Hossain & Mohammed Abu Jahed & Anna Lee Rowe, 2021. "Poor resource capital of micro-entrepreneurs: the mediating role of entrepreneurial orientation," Management Research Review, Emerald Group Publishing Limited, vol. 44(10), pages 1366-1389, May.
    5. Eijaz Ahmed Khan & Mohammad Alamgir Hossain & Mohammed Abu Jahed & Anna Lee Rowe, 2021. "Poor resource capital of micro-entrepreneurs: the mediating role of entrepreneurial orientation," Management Research Review, Emerald Group Publishing Limited, vol. 44(10), pages 1366-1389, May.
    6. Périlleux, Anaïs & Szafarz, Ariane, 2015. "Women Leaders and Social Performance: Evidence from Financial Cooperatives in Senegal," World Development, Elsevier, vol. 74(C), pages 437-452.
    7. Marek Hudon & Marc Labie & Patrick Reichert, 2020. "What is a Fair Level of Profit for Social Enterprise? Insights from Microfinance," Journal of Business Ethics, Springer, vol. 162(3), pages 627-644, March.
    8. Perways Alam & Imran Azad, 2021. "Impact of Microfinance on Income and Employment of Women in Jigjiga, Ethiopia," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 373-381.
    9. Sufi Faizan Ahmed & Qaisar Ali Malik, 2015. "Credit Risk Management and Loan Performance: Empirical Investigation of Micro Finance Banks of Pakistan," International Journal of Economics and Financial Issues, Econjournals, vol. 5(2), pages 574-579.
    10. Jemal Abagissa, 2021. "The Assessment of Micro and Small Enterprises Performance and Challenges in Addis Ababa, Ethiopia," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 9(1), pages 8-18.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anaïs Périlleux & Ariane Szafarz, 2022. "Women in the boardroom: a bottom–up approach to the trickle-down effect," Small Business Economics, Springer, vol. 58(4), pages 1783-1800, April.
    2. Namrata Gupta & Anita Mirchandani, 2020. "Corporate governance and performance of microfinance institutions: recent global evidences," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 24(2), pages 307-326, June.
    3. Hadar Gafni & Marek Hudon & Anaïs Périlleux, 2021. "Business or Basic Needs? The Impact of Loan Purpose on Social Crowdfunding Platforms," Journal of Business Ethics, Springer, vol. 173(4), pages 777-793, November.
    4. Moez Bennouri & Anastasia Cozarenco & Samuel Anokye Nyarko, 2024. "Women on Boards and Performance Trade-offs in Social Enterprises: Insights from Microfinance," Journal of Business Ethics, Springer, vol. 190(1), pages 165-198, February.
    5. Simba, Amon & Wang, Yan & del Olmo García, Francisco, 2023. "Deconstructing self-organisation in microentrepreneurship: A social embeddedness perspective," Journal of Business Research, Elsevier, vol. 162(C).
    6. Serrano-Cinca, Carlos & Cuellar-Fernández, Beatriz & Fuertes-Callén, Yolanda, 2023. "Pathways to self-sufficiency in the microfinance ecosystem," The Quarterly Review of Economics and Finance, Elsevier, vol. 92(C), pages 262-273.
    7. Jie Wu & Zhixin Chen & Xiang Ji, 2020. "Sustainable trade promotion decisions under demand disruption in manufacturer-retailer supply chains," Annals of Operations Research, Springer, vol. 290(1), pages 115-143, July.
    8. Laxmi Remer & Hanna Kattilakoski, 2021. "Microfinance institutions’ operational self-sufficiency in sub-Saharan Africa: empirical evidence," International Journal of Corporate Social Responsibility, Springer, vol. 6(1), pages 1-12, December.
    9. Huang Xing, 2017. "The decision method of emergency supplies collection with fuzzy demand constraint under background of sudden disaster," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 85(2), pages 869-886, January.
    10. Tang, Christopher S., 2010. "A review of marketing-operations interface models: From co-existence to coordination and collaboration," International Journal of Production Economics, Elsevier, vol. 125(1), pages 22-40, May.
    11. Pasura Aungkulanon & Walailak Atthirawong & Pongchanun Luangpaiboon & Wirachchaya Chanpuypetch, 2024. "Navigating Supply Chain Resilience: A Hybrid Approach to Agri-Food Supplier Selection," Mathematics, MDPI, vol. 12(10), pages 1-41, May.
    12. Choi, Tsan-Ming & Chiu, Chun-Hung, 2012. "Mean-downside-risk and mean-variance newsvendor models: Implications for sustainable fashion retailing," International Journal of Production Economics, Elsevier, vol. 135(2), pages 552-560.
    13. Sandra Kendo & Josephine Tchakounte, 2022. "Impact of asset size on performance and outreach using panel quantile regression with non-additive fixed effects," Empirical Economics, Springer, vol. 62(1), pages 65-92, January.
    14. Caserta, Maurizio & Monteleone, Simona & Reito, Francesco, 2018. "The trade-off between profitability and outreach in microfinance," Economic Modelling, Elsevier, vol. 72(C), pages 31-41.
    15. Surya Prakash & Sameer Kumar & Gunjan Soni & Vipul Jain & Ajay Pal Singh Rathore, 2020. "Closed-loop supply chain network design and modelling under risks and demand uncertainty: an integrated robust optimization approach," Annals of Operations Research, Springer, vol. 290(1), pages 837-864, July.
    16. Tang, Liang & Jing, Ke & He, Jie & Stanley, H. Eugene, 2016. "Robustness of assembly supply chain networks by considering risk propagation and cascading failure," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 459(C), pages 129-139.
    17. Assa, Hirbod & Sharifi, Hossein & Lyons, Andrew, 2021. "An examination of the role of price insurance products in stimulating investment in agriculture supply chains for sustained productivity," European Journal of Operational Research, Elsevier, vol. 288(3), pages 918-934.
    18. Zhao, Na, 2019. "Managing interactive collaborative mega project supply chains under infectious risks," International Journal of Production Economics, Elsevier, vol. 218(C), pages 275-286.
    19. Boulaksil, Youssef, 2016. "Safety stock placement in supply chains with demand forecast updates," Operations Research Perspectives, Elsevier, vol. 3(C), pages 27-31.
    20. Tang, Christopher S. & Davarzani, Hoda & Sarkis, Joseph, 2015. "Quantitative models for managing supply chain risks: A reviewAuthor-Name: Fahimnia, Behnam," European Journal of Operational Research, Elsevier, vol. 247(1), pages 1-15.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:7:y:2023:i:10:p:1956-1971. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.