Role of Financial Literacy, Financial Innovation, Financial Inclusion on SME Access to Credit in Kenya: A Case of Kumisa SACCO
Abstract
There has been important obligation of monetary appreciation regarding the role of financial literacy, innovation and financial inclusion in refining financial access levels globally. Deficiency of financial access nevertheless is a key hindrance to the growth of these firms. Therefore, this research project aimed at looking at the factors that affects access of credit by SMEs in Kenya. The study were guided by the following objectives: determine the effect of financial literacy on the credit access by SMEs in Kenya to, establish the effect of financial inclusion on the credit access by SMEs in Kenya, establish the effect of financial innovation on the credit access by SMEs in Kenya and to determine the joint effect of financial literacy, financial innovation and financial inclusion on the credit access bySMEs in Kenya. Descriptive research design was used in the study. The population of interest in this study was members of 3000 members Kumisa Sacco in Kiambu Town of Kiambu County. The sample size for the study was 340 respondents. The method of data collection instruments involved the use of primary data and secondary data. Primary data was gathered by use of questionnaires. Secondary data was obtained from desk reviews. The study employed descriptive and inferential analysis. Regression analysis was used to establish the relative significance of each of the variables on the effect of financial literacy, financial innovation and financial inclusion on the SME access to credit in Kenya. From the analysis it was established that financial literacy, financial innovation and financial inclusion accounted for 79% of the changes in SMEs access to credit. The study recommended that there should be efforts in promoting financial literacy, financial innovation and financial inclusion in Kiambu County. This study covered only basic financial literacy, financial innovation and financial inclusion in order to come up with the results. There is need to study a single variable e.g. the effect of Financial Inclusion on SMEs access to credit in Kenya.
Keywords: Financial Literacy, Financial Inclusion, Financial Innovation, Credit Access, SMEs, Kenya
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