Evaluation of Microfinance indicators in actualizing vision 2030 in the agricultural sector, Kenya
Microfinance institutions play a major role worldwide towards poverty eradication especially amongst the small and micro enterprises. Microfinance has evolved as an economic development approach intended to benefit low income women and men. It's a provision of financial services to low income clients, including the self employed. Financial services generally include savings and credit; however, some microfinance organizations also provide insurance and payment services. In addition to financial intermediation, many MFIs provide social intermediation services, such as group formation, development of self confidence, and training in financial literacy and management capabilities among members of a group. Thus, the definition of microfinance often includes both financial intermediation and social intermediation. Microfinance is not simply banking, it is a development tool. With regard to attainment of Kenya increased value in agriculture, the role of micro finance cannot be overlooked. There is need to find out the contribution of the MFIs in the attainment of increased value in agriculture. According to the Economic survey report on the attainment of Kenya Increased value in agriculture by 2030, Reasons for lower Growth than the Projected were partly attributed to comparably higher interest rates which later led to crowding out private sector investment. The importance of MFIs in attaining the Kenya Increased value in agriculture comes into play taking into account its accessibility in terms of cost. This study sought to find out microfinance indicators contribution to vision 2030 on increased value in agriculture. A correlation research design was employed in this study. The study targeted 6,134 farmers spread in 47 counties as obtained from 17 Micro finance institutions in the county. The study sampled 362 respondents randomly stratified according to their counties. Primary data was collected using questionnaires. Secondary data was obtained using document analysis. A pilot study was conducted to determine reliability and validity of the research instruments using Cronbach alpha and content validity respectively. Descriptive and inferential statistics were used for the purpose of data analysis. To test the research hypotheses, Pearson correlation and regression were used to measure the general relationship between dependent and independent variables. The findings revealed that microfinance institutions indicators have significant contribution to the increased value in agriculture. Microfinance outreach played significant role in the realization of increased value in agriculture through its depth and breadth. MFI portfolio quality had positive contribution to the realization of increased value in agriculture but the contribution is not significant due presence non performing loans in some MFIs. Efficiency of MFIs operations had significant contribution to realization of increased value in agriculture as the MFI clients can easily access credit. MFI sustainability had significant positive contribution to the increased value in agriculture. The study recommends the MFIs should reach out to more people as the counties have high levels in poverty index. Key Words Microfinance Institutions indicators, vision 2030 in the agricultural sector, Kenya DOI 10.7176/RJFA/10 4 15
Research Journal of Finance and Accounting