Analysis Of Factors Affecting Accessibility Of Credit Facilities Among The Small And Medium-Enterprises: A Case Study Of Siaya Town
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Abstract

Access to credit facilities play a critical role in the establishment and management of Small and Medium Enterprises. Meeting financial obligations reflects a SMEs entitlement to a healthy competition and continuity. However, businesspersons encounter a lot of challenges prompting financial accessibility in SMEs a fantasy. The common challenges in access to external funding resonate around interest rates, asset ownership and human resource. In this regard, the study seeks to establish the factors affecting accessibility to credit facilities among businesses operating in Siaya Town. In particular, the study sought to determine the effect of interest rates charged by financial institutions on credit borrowing, the effect of the level of education of the borrowers on accessibility to credit facilities, the demand for collateral by financial institutions, and the effect of number and ratio of lending institutions to borrowers in Siaya Town on credit accessibility. The study applied quantitative survey design. This study applied a simple random sampling technique to select 35 SMEs, using the managers/owners of the SMEs and the laborers as the respondents. The data collected was quantitative in nature and was appropriately analyzed using regression analysis, using the SPSS tool. The study concluded that the relevant factors that affect access to credit facilities are a reasonable level of education, interest rates charged by the lending institutions, and the number of lending institutions. The study recommends establishment and enforcement of policy instruments focused towards better access to education, reducing interest rates and registration of more financial institutions to be established and enforced.