Credit Accessibility and Performance of Small and Medium Enterprises in Meru County, Kenya

Abstract

This study sought to investigate the credit accessibility and performance of SMEs in Meru County, Kenya. Specifically, the study sought to determine the influence of lending procedures on the performance of SMEs in Meru County. The study adopted a descriptive research design. The targeted population comprised 599 SMEs registered by the Meru County Government, which were operating in the previous three years, and then within the nine sub-counties of Meru County. The researcher used Krejcie and Morgan's table to determine sample size from a given population to determine a sample of 234 SMEs and proportionate random stratified design to identify the SMEs to comprise the sample. Questionnaires were used to collect data from respondents, with each SME being represented by the owner or a senior employee. Data were analyzed and presented using descriptive statistics like frequency tables and graphs. Chi-square tests were conducted to test for any relationship between independent variables and the performance of SMEs in the county. The study revealed that the majority of the respondents (83%) agreed that the loan application process was complicated. It was revealed that the lending procedure had a statistically significant relationship with the performance of SMEs in Meru County. The study recommends that financial institutions should simplify the loan application process as much as possible.