The Role of Financial Support on the Growth of Micro and Small Enterprises: A Case Study of Artisan Enterprises in Oyugis Township, Homabay County

Micro and Small Enterprises (MSE’s) are business ventures that target the lower income segment of the population who are largely poor, un-bankable and lack formal employment. They are featured more in the rural areas and small urban centers and characterized by low initial capital, individual or group management, limited stock, one- spot operation and smaller market coverage. MSE’s are very important to the economies of developing countries because they are a source of employment to majority of the population. This study therefore aims at assessing the role of financial support on the growth of Artisan Enterprises in Oyugis Township, Homabay County by assessing the sources of funding and the utilization and management of funds for growth by Artisan Enterprises. The study uses the growth and empowerment theoretical frame work which suggests that building of an enabling business environment encourages investments and growth. The framework was used to explore the variables and data was analyzed and presented using descriptive and inferential statistics which provided valuable information on factors that influenced the growth of MSE’s in Oyugis Township. The study population was 7 financial institutions, 56 Artisan Enterprises and the Oyugis Local Authority Staff. Random sampling technique was used to get a sample size of 5 financial institutions and 18 Artisan Enterprises for survey. Questionnaires were also used to collect data. Data was analyzed using descriptive statistics, percentages and frequencies and inferential statistics of Spearman’s correlation coefficient to establish the strength of the relationship between the independent and dependent variables. The study findings indicate that there is a strong relationship between the financial support and the growth of MSE’s although numerous challenges especially in the management of funding act against them resulting to very low levels of growth. The findings of this research may assist in assessing the performance of the financial intermediaries and the solutions to business obstacles that could see the Enterprises have a rebirth. The key solutions include; outsourcing for funds to support the women, youth and the unemployed to get a sojourn specifically job creation.