Analysis of challenges faced by women entrepreneurs in accessing finance in Kenya - a case of women entrepreneurs in Nairobi Central Business District

Dissertation submitted in partial fulfilment of the requirements for the Master of Business Administration (MBA) Degree, Strathmore Business School, Strathmore UniversityAccess to adequate and affordable credit for businesses remains one of the key challenges to economic development in Kenya despite efforts by various stakeholders. This study sought to analyze the challenges faced by women entrepreneurs in accessing finance in Kenya and focuses on Nairobi central business district. the study was guided by the following specific objectives: to determine the extent to which literacy levels of women entrepreneurs affect their access to finance in Nairobi central business district; to determine the extent to which the number of lending institutions available affect access to finance by women entrepreneurs in Nairobi central business district; to determine the extent to which collateral requirements by financial institutions affect access to finance by women entrepreneurs in Nairobi central business district; and to determine the extent to which interest rates charged by financial institutions affect access to finance by women entrepreneurs in Nairobi central business district. In order to undertake the study a descriptive survey was used. The target population was drawn from the female owned enterprises in Nairobi central business district. A sample size of 400 women entrepreneurs was used in the study. Primary data was collected from the proprietors/managers of the enterprises aided by a semi-structured questionnaire. Data pertaining to the objectives of the study was analyzed using descriptive statistics. In order to evaluate the relationship between the independent and dependent variables, multiple regression was undertaken. The study findings indicate that majority of the women entrepreneurs had attained at least a tertiary level of education. It validated that lack of collateral is the most significant constraint to women entrepreneurs in Nairobi in accessing loans despite different social economic characteristics. The study also found that number of lending financial institutions as not being a significant constraint in accessing finance for women entrepreneurs in the CBD. The study recommends risk free line of credit to banks by governments and non-governmental organizations. The study also recommends that financial institutions partner with non-governmental organizations and the government in obtaining low interest rates funds for onward lending to women entrepreneurs. Further studies may be carried out examining a wider area, including other urban areas and rural areas. The study also focused only women entrepreneurs but further studies may be done with a focus on financial institutions