The Relationship between Small Scale Enterprises Performance and Access to Credit from Microfinance Institutions in Mount Elgon Constituency, Kenya

The purpose of this study was to examine the factors that affect access to credit by SSE s in Mt. Elgon District. The study addressed four objectives namely; establish the relationship between owner/manager characteristics, business characteristics, SSE performance and belonging to a social group and access to credit from MFIs. The study null hypotheses were derived from the objectives. The study adapted a descriptive survey design. This design was used to determine the nature of an existing state of affairs within the population. The target population was all small scale enterprise operations in Mt. Elgon district. Only SSEs that had existed for more than 2 years were considered totalling around 1200. The target population was stratified into homogenous categories as wholesalers, retailers, and restaurant and service delivery. Samples of 120 SSEs were randomly and proportionally drawn from the population strata. A structured questionnaire was used to collect data. An interview schedule was used to solicit for in depth information from key informants pertaining access to credit by SSEs. Data was summarized and presented using percentages, means and standard deviation chi-square and t- tests were used to establish relationships between categorical and continuous data respectively. Based on the findings of the study, it was concluded that owner characteristics, business characteristics, group membership affects access to credit by SSEs in Mt. Elgon constituency. Owners/mangers should acquire skills adequate to drive the performance of their businesses. The study recommends that SSE owners should be encouraged to form groups which provide social capital that attracts MFI service easily.