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Abstract:
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This study assessed socio-economic effects of micro-finance loans on the wellbeing of women in informal settlements in Kenya, focusing on Kiganjo in Kiambu County as a case study. The study specifically sought to examine the effects of loans on household wellbeing among women, analyze the effects of loans from the micro-finance institutions on the growth of the business, examine the challenges of utilizing loans from MFIs, and recommend strategies for improving the utilization of borrowed funds. The study adopted a descriptive research design, which enabled the researcher to describe the contribution of MFI’s in improving the wellbeing of women from informal settlements. The study targeted 300 women who had borrowed and repaid their loans since 2014. The sample size was 99 respondents comprising of 91 women borrowers and 8 key informants. Data was collected through questionnaires, key informant interview guides, and focus group discussions. Collected data was analysed using the Statistical Package for Social Sciences (SPSS) version 21.0 and the findings were presented in form of tables, graphs and charts. The study finding showed that loans significantly improved households’ wellbeing by enabling them to cater for their family needs, such as buying of food, clothing, and payment of school fees for their children. The findings further indicated that loans helped majority of women in informal settlements to boost and grow their business. The study noted that some of the challenges experienced in loan utilization could be addressed by reduced interest rates from MFIs, sufficient funding, and providing training programs in entrepreneurship and financial management to women groups in the informal settlements. The study recommends that MFIs should offer sufficient funding and closely work with the regulator to offer reduced interest rates. |