ABSTRACT
The purpose of study was to explore the determinant of financial credit uptake among women owned self-help groups (SHG) projects in Samburu County, Kenya. The study was guided by four research objectives. The objectives sought to determine how education and training, socio- cultural practices, financial literacy skills and information asymmetry influenced financial credit uptake among women owned Self Help Groups in Samburu County. The study was carried out using descriptive research survey design. The target population was 345 respondents while the sample was115 respondents. Data was collected using questionnaires. Data was analyzed by use of Frequencies, Percentages, Mean, standard deviation, Chi square and ANOVA. Findings revealed that level of education and training of the SHG members affected financial credit uptake. It was also revealed that lack of training, low levels of education, lack of awareness of training on SHG matters, low or lack of education was a major hindrance to financial credit uptake among women. Findings also revealed that socio-cultural practices such as patriarchy, norms and taboos and perceptions women commitments at home were major determinants to financial credit uptake. It was also revealed that lack of financial literacy skills affected financial credit uptake. Women members of the SHG did not understanding the financial requirements for credit uptake. The findings also revealed that lack of information of where to access financial credit. It was also revealed that most of the SHGs feared credit uptake from lending organization due to lack of information. There was significant association between education and training, cultural practices, financial literacy skills, information asymmetry and financial credit uptake. Data indicated that the p-values for all the variables are smaller than the level of significance of the study (0.05).Thus education and training (x2=14.165, p-value=0.00); cultural practices (x2=11.511, p-value=0.002); financial literacy skills (x2=17.129, p-value=0.00) and information asymmetry (x2=18.314, p –value=0.000) have a significant association with financial credit uptake. This implies that the independent variables and dependent variables had close association. There was a positive correlation coefficient (r), = 0.712, coefficient of determination (r2) = 0.507 and adjusted r squared between education and training, cultural practices, financial literacy skills, information asymmetry explain 50.7% percent of the variation in financial credit uptake. Based on the findings of the study it was concluded that education and training of SHG members influenced financial credit uptake among women owned Self Help Groups. The study concluded that financial literacy skills influenced financial credit uptake among women owned Self Help Groups in Samburu County. It was also concluded that information asymmetry influenced financial credit uptake among women owned Self Help Groups in Samburu County. Based on the study findings it was recommended that there is need for the Samburu county government and Non-governmental to educate the women owned SHGs on the importance of financial credit uptake. The study also recommends that the financial institutions should reach the women at the grassroots and educate them on the importance of financial credit uptake. The study also recommended that women should be empowered to shun some of the cultural practices that hinder them from accessing financial credit. The researcher suggested that a study on the influence of self-help groups on the economic empowerment of women and their households among the nomadic pastoralists’ areas should be conducted. It was also suggested that a replication of the study in urban areas of Kenya where the self-help groups have been formed and lastly a study on the influence of the emergence of Micro-finance institutions on the performance of the self-help groups should be conducted.
CHAPTER ONE INTRODUCTION
Background of the study
Worldwide, women face extra limits on their choices and chances than men. (Fukuda-Parr, 2012). Viable development requires the participation of both men and women. A rising body of proof indicates that gender equality contributes to poverty drop and sustainable growth (United Nations Development Programme, 2013). Women’s improved education and participation in the labor force has been related with improved economic performance. Global experience and a multitude of studies have verified that women have the potential to be a substantial entrepreneurial force- contributing to the growth of local, national and global economies. (ESCAP, 2012). In many low- income countries, over half of the population lives in poverty, which does not include those who are not considered ‘poor’ but live under disadvantaged conditions and will suffer from poor health (Leon, Walt, and Gilson, 2015). Women represent about 70% of the poor (United Nations Development Programme, 2015), and are particularly susceptible to health problems due to persistent gender inequalities.
The United Nations (UN) Sustainable Development Goals (SDGs) envisage zero hunger and a poverty-free world through goals number 2 and 1, respectively. This is an important global agenda that calls for active participation of women entrepreneurs in economic growth and development hence the need for women’s empowerment as a strategy to achieve gender equality as well as the inherent capacity building processes and various other factors (Puhazhendi, 2010). Women’s empowerment is the process in which women individually and collectively become active, conversant and goal oriented players who take/or support initiatives to overcoming
gender inequalities. The Word Bank has suggested that empowerment of women should be a key aspect of social development programs (World Bank, 2001). In many developing countries, one strategy which has been found to be promising is participatory institution building in the self- help groups, often coupled with savings and micro credit loans (ESCAP, 2012)
As part of women empowerment, Self Help Groups (SHGs) have emerged as one of the major strategies for the convergence of services and activities. Self Help Group is an informal cooperative society that is used to save money, these kinds of arrangements are common in East Africa, an especially Kenya. SHGs are generally called the term “chama” in Kenya. The term chama in Swahili (and it’s the plural “vyama”) means “group”, ‘organization’, ‘association’, ‘union’, club or , “party” that can be included in all kinds of activities and it is a term that has been used widely in Kenya to refer mainly to women’s groups (Kitetu, 2013). The Cooperative is also called micro-savings groups. The SHGs concept arose out of the idea of ‘harambee’, which means “all together”, in the 1980s. Initially, SHGs was exclusively women’s groups, but as the phenomenon grow, men started participating in SHGs as well. In Kenya, there are estimated to be 300,000 SHGs managing a total of KSH 300 billion (USD $3.4 billion) in assets. It is estimated that one in three Kenyans is a SHG member (Kitetu, 2013). This SHG approach is gaining popularity in Kenya among women and the youth and the government encourages them to register with the Ministry of Gender and Social Services.
Purbabasu (2014) indicates that Self Help Groups in India have emerged as a successful means of improving the socio-economic conditions of rural families with very little administrative expenses. Seibel and Khadka (2012) state that vast number of SHGs had been established in India in the recent past are self-reliant, autonomous and despite the fact that they were mostly from the lowest and other disadvantaged groups, they had proven to be the better savers,
borrowers and investors. Again, the SHGs mobilized their own savings, transformed them into loans to members and ploughed back their interest income into equity.
Most women are forced to grow their businesses using little or no formal credit facilities. The dependency on personal assets and informal sources of capital limit the amount of financing available. Most businesses remain informal and in low-value areas – with not enough emphasis on financial products and services to help expand business from micro to small to medium to large size. Informal sources of credit are not sufficient to bring them into the SME range ([International Finance Corporation] (IFC), 2007 and [Foreign Investment Advisory Service] FIAS/IFC, 2005) Scholars agree that credit has existed to have positive impact on the performance of businesses in Kenya (Peter, 2001, Tanzania, Kuzilwa, 2005, Uganda, Samiha, 2007). The significance of credit accessibility mainly to women in Kenya has led to the creation of Women Enterprise Fund (WEF) in order to address the credit gap and back up business development for women (KIPPRA, 2010)..
According to Abey (2018), women owned SHGs are in their pursuit to become economically self-reliant, generate output that enhances livelihoods within the family leading to wealth creation, poverty alleviation and improved living standards. The United Nations Economic Commission for Africa (UNECA) Economic Report on Africa, 2005, indicates that the outreach of financial institutions has covered only 30-35 percent of the population. It means that the rest of the population still relies on merchants, money lenders, and traditional co-operatives for financing of socio-economic activities with high interest rates (UNECA Economic Report on Africa, 2005). Access to credit facilities and employment is one of the major challenges faced by women owned SHGs in many parts of the world. Credit facilities are mainly informal savings through banks or microfinance institutions which charge high interest rates and discourage
women from borrowing. Therefore, women are usually left with only one alternative of devising ways of accessing credit facilities through self-help groups in the form of merry-go-rounds or revolving funds. Money raised from the groups is loaned to individual women to enable them meet basic needs for their families and also finance income generating activities for development.
