IDEAS home Printed from https://ideas.repec.org/a/hur/ijarbs/v7y2017i6p429-448.html
   My bibliography  Save this article

Strategies for Accessing Credit by Small and Medium Enterprises: A Case Study of Kakamega Town, Kenya

Author

Listed:
  • Henry Jefferson Ogoi

Abstract

Small and medium enterprise business owners play an important role in the Kenyan economy as they account for approximately 78 percent of total employment and 57 percent of the new jobs created. Despite their significant contribution, SME business owners face enormous challenges as such as access to credit, which affects their businesses. This study adopted a qualitative research paradigm with a multiple case study design to explore the strategies Kenyan SME business owners used to access credit to improve the profitability and growth of their businesses. Semi-structured interviews were used to collect primary data from a sample of four SME owners of businesses located in Kakamega Town, Kenya, who have had access to credit. Company documents were used as supplementary data. All interpretations from the data were subjected to member checking to ensure the reliability of the findings. The research findings revealed that SME business owners face challenges in accessing credit to sustain their businesses because of the higher collateral requirements demanded by banks as a condition for lending. The study recommended that SME owners use their education and professional background, information access and group lending strategies to access credit to improve the profitability and growth of their businesses.

Suggested Citation

  • Henry Jefferson Ogoi, 2017. "Strategies for Accessing Credit by Small and Medium Enterprises: A Case Study of Kakamega Town, Kenya," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(6), pages 429-448, June.
    • Handle: RePEc:hur:ijarbs:v:7:y:2017:i:6:p:429-448
    as

    Download full text from publisher

    File URL: http://hrmars.com/hrmars_papers/Strategies_for_Accessing_Credit_by_Small_and_Medium_Enterprises.pdf
    Download Restriction: no
    File URL: http://hrmars.com/hrmars_papers/Strategies_for_Accessing_Credit_by_Small_and_Medium_Enterprises.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gordon Walker & Bruce Kogut & Weijian Shan, 1997. "Social Capital, Structural Holes and the Formation of an Industry Network," Organization Science, INFORMS, vol. 8(2), pages 109-125, April.
    2. Poulis, Konstantinos & Poulis, Efthimios & Plakoyiannaki, Emmanuella, 2013. "The role of context in case study selection: An international business perspective," International Business Review, Elsevier, vol. 22(1), pages 304-314.
    3. Woolcock, Michael & Narayan, Deepa, 2000. "Social Capital: Implications for Development Theory, Research, and Policy," The World Bank Research Observer, World Bank, vol. 15(2), pages 225-249, August.
    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. Argentiero, Amedeo & Cerqueti, Roy & Sabatini, Fabio, 2021. "Does social capital explain the Solow residual? A DSGE approach," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 35-53.
    2. Thomas Maak, 2007. "Responsible Leadership, Stakeholder Engagement, and the Emergence of Social Capital," Journal of Business Ethics, Springer, vol. 74(4), pages 329-343, September.
    3. Mariano Nieto & Nuria González-Álvarez, 2016. "Social capital effects on the discovery and exploitation of entrepreneurial opportunities," International Entrepreneurship and Management Journal, Springer, vol. 12(2), pages 507-530, June.
    4. Maria Johansson & Hans Westlund, 2008. "Social Capital Enhancement Through Regional Co-Operation: A Study Of A Swedish Policy Program," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 2(1), pages 35-53, June.
    5. Alejandra Marin & Ronald Mitchell & Jae Lee, 2015. "The Vulnerability and Strength Duality in Ethnic Business: A Model of Stakeholder Salience and Social Capital," Journal of Business Ethics, Springer, vol. 130(2), pages 271-289, August.
    6. Michael Weiler & Oliver Hinz, 2019. "Without each other, we have nothing: a state-of-the-art analysis on how to operationalize social capital," Review of Managerial Science, Springer, vol. 13(5), pages 1003-1035, November.
    7. Mahto, Raj V. & Belousova, Olga & Ahluwalia, Saurabh, 2020. "Abundance – A new window on how disruptive innovation occurs," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    8. Giuseppina Guagnano & Elisabetta Santarelli & Isabella Santini, 2016. "Can Social Capital Affect Subjective Poverty in Europe? An Empirical Analysis Based on a Generalized Ordered Logit Model," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(2), pages 881-907, September.
    9. Lori Rosenkopf & Paul Almeida, 2003. "Overcoming Local Search Through Alliances and Mobility," Management Science, INFORMS, vol. 49(6), pages 751-766, June.
    10. Zhiang (John) Lin & James A. Kitts & Haibin Yang & J. Richard Harrison, 2008. "Elucidating strategic network dynamics through computational modeling," Computational and Mathematical Organization Theory, Springer, vol. 14(3), pages 175-208, September.
    11. Hong Sun & Valentina Hartarska & Lezhu Zhang & Denis Nadolnyak, 2018. "The Influence of Social Capital on Farm Household’s Borrowing Behavior in Rural China," Sustainability, MDPI, vol. 10(12), pages 1-20, November.
    12. Blocker, Christopher P. & Ruth, Julie A. & Sridharan, Srinivas & Beckwith, Colin & Ekici, Ahmet & Goudie-Hutton, Martina & Rosa, José Antonio & Saatcioglu, Bige & Talukdar, Debabrata & Trujillo, Carlo, 2013. "Understanding poverty and promoting poverty alleviation through transformative consumer research," Journal of Business Research, Elsevier, vol. 66(8), pages 1195-1202.
    13. Grootaert, Christiaan, 1999. "Social capital, houshold welfare, and poverty in Indonesia," Policy Research Working Paper Series 2148, The World Bank.
    14. Dufhues, Thomas & Buchenrieder, Gertrud & Munkung, Nuchanata, 2012. "Individual social capital and access to formal credit in Thailand," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 123401, International Association of Agricultural Economists.
    15. Kudic, Muhamed & Pyka, Andreas & Günther, Jutta, 2012. "Determinants of Evolutionary Change Processes in Innovation Networks – Empirical Evidence from the German Laser Industry," IWH Discussion Papers 7/2012, Halle Institute for Economic Research (IWH).
    16. Ferretti, Marco & Guerini, Massimiliano & Panetti, Eva & Parmentola, Adele, 2022. "The partner next door? The effect of micro-geographical proximity on intra-cluster inter-organizational relationships," Technovation, Elsevier, vol. 111(C).
    17. Zhan, Shaohua, 2015. "From Privatization to Deindustrialization: Implications of Chinese Rural Industry and the Ownership Debate Revisited," World Development, Elsevier, vol. 74(C), pages 108-122.
    18. Gabriela Citlalli López-Torres & Gonzalo Maldonado Guzmán & Sandra Yesenia Pinzón Castro & Ricardo García Ramírez, 2016. "Collaboration and innovation activities in SMEs," Contaduría y Administración, Accounting and Management, vol. 61(3), pages 568-581, Julio-Sep.
    19. Aparna Kumari & Tim G. Frazier, 2021. "Evaluating social capital in emergency and disaster management and hazards plans," 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. 109(1), pages 949-973, October.
    20. Jan Fagerberg & Maryann Feldman & Martin Srholec, 2011. "Technological Dynamics and Social Capability: Comparing U.S. States and European Nations," Working Papers on Innovation Studies 20111114, Centre for Technology, Innovation and Culture, University of Oslo.

    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:hur:ijarbs:v:7:y:2017:i:6:p:429-448. 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: Hassan Danial Aslam (email available below). General contact details of provider: http://hrmars.com/index.php/pages/detail/IJARBSS .

    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.