An assessment of the effects of financial inter mediation on business performance: a case study of women owned micro and small enterprises in Kisii municipality – Kenya

Women as micro and small entrepreneurs have increasingly become the key target group for financial intermediaries. Consequently providing access to financial and non-financial services is not only considered a precondition for poverty alleviation but also considered as a strategy for empowering women. The micro and small enterprises play an important role in the Kenyan economy. The purpose of this study was to assess the effects of financial intermediation on business performance. The study was carried out on women owned micro and small enterprises in Kisii Municipality. Descriptive research design was adopted for the study. The study sought to : assess the extent to which financial intermediaries intermediates between savers and borrowers, to assess the level of business performance of micro and small women owned enterprises and ; to assess whether financial intermediation has an effect on business performance on women owned MSEs in Kisii Municipality. The target population of the study was 150 women owned enterprises in Kisii Municipality (Equity Bank, Kenya Women Finance Trust and Kenya Rural Enterprise-Loan Programme beneficiaries).Random sampling procedure was adopted to sample 108 respondents who participated in the study. Data was collected using a structured questionnaire. Data analysis was done using descriptive statistics techniques which include frequency tables, percentages and summated averages. A likert scale was used to identify the extent to which financial intermediation influences business performance on women owned MSEs in Kisii Municipality. Microfinance loans, bank loans and co-operative loans were the most preferred sources of finance by the women entrepreneurs. The study findings can be useful to the women entrepreneurs in planning and managing their businesses effectively. The study can also help financial intermediaries and policy makers to formulate appropriate policy framework to guide in the management of registered micro and small women owned enterprises and women entrepreneurship in the country. It can also contribute to the already existing literature on financial intermediation