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Historical Incidences of Credit Rationing among Micro and Small Enterprises in Kenya

Year 2017, Volume: 7 Issue: 4, 229 - 236, 01.12.2017

Abstract

In the mid-2000s, the Government of Kenya recognised the existence of institutional barriers preventing micro and small enterprises (MSEs) from directly accessing credit from financial institutions. This development informed the change of lending policy from direct lending to group lending in government supported programmes. However, this change was effected without a comprehensive theoretical and empirical examination of the underlying reasons why MSEs failed to access credit. This study fills this gap by investigating the the underlying reasons MSEs were credit rationed in Kenya. The general consensus from this study is that there was a high incidence of credit rationing in Kenya in 1990s and 2000s which stemmed from information asymmetry. The study concludes that the Government’s current policy of promoting group lending is indeed workable if the mode can assist in mitigating information asymmetry in credit markets.

Year 2017, Volume: 7 Issue: 4, 229 - 236, 01.12.2017

Abstract

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Details

Other ID JA52JM93ER
Journal Section Research Article
Authors

Kenneth Majau Mugambi This is me

Alex A van der Merwe This is me

Publication Date December 1, 2017
Published in Issue Year 2017 Volume: 7 Issue: 4

Cite

APA Mugambi, K. M., & Merwe, A. A. v. d. (2017). Historical Incidences of Credit Rationing among Micro and Small Enterprises in Kenya. International Journal of Economics and Financial Issues, 7(4), 229-236.
AMA Mugambi KM, Merwe AAvd. Historical Incidences of Credit Rationing among Micro and Small Enterprises in Kenya. IJEFI. December 2017;7(4):229-236.
Chicago Mugambi, Kenneth Majau, and Alex A van der Merwe. “Historical Incidences of Credit Rationing Among Micro and Small Enterprises in Kenya”. International Journal of Economics and Financial Issues 7, no. 4 (December 2017): 229-36.
EndNote Mugambi KM, Merwe AAvd (December 1, 2017) Historical Incidences of Credit Rationing among Micro and Small Enterprises in Kenya. International Journal of Economics and Financial Issues 7 4 229–236.
IEEE K. M. Mugambi and A. A. v. d. Merwe, “Historical Incidences of Credit Rationing among Micro and Small Enterprises in Kenya”, IJEFI, vol. 7, no. 4, pp. 229–236, 2017.
ISNAD Mugambi, Kenneth Majau - Merwe, Alex A van der. “Historical Incidences of Credit Rationing Among Micro and Small Enterprises in Kenya”. International Journal of Economics and Financial Issues 7/4 (December 2017), 229-236.
JAMA Mugambi KM, Merwe AAvd. Historical Incidences of Credit Rationing among Micro and Small Enterprises in Kenya. IJEFI. 2017;7:229–236.
MLA Mugambi, Kenneth Majau and Alex A van der Merwe. “Historical Incidences of Credit Rationing Among Micro and Small Enterprises in Kenya”. International Journal of Economics and Financial Issues, vol. 7, no. 4, 2017, pp. 229-36.
Vancouver Mugambi KM, Merwe AAvd. Historical Incidences of Credit Rationing among Micro and Small Enterprises in Kenya. IJEFI. 2017;7(4):229-36.