The Role of Agricultural Finance on Sme Growth in Kenya

AGRICULTURAL FINANCE AND MICRO AND SMALL ENTERPRISE GROWTH: A CASE OF AGRICULTURAL FINANCE CORPORATION MACHAKOS DISTRICT, KENYA

BY

JOSEPH MACHARIA KINYANJUI

RESEARCH PROJECT SUBMITTED TO THE SCHOOL OF HUMAN RESOURCE DEVELOPMENT IN PARTIAL FULFILLMENT FOR THE AWARD OF A DEGREE IN MASTER OF SCIENCE IN ENTREPRENEURSHIP OF JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY

MARCH 2008

DECLARATION
I declare that this is my original work and to the best of my knowledge, this Research Project has not been presented for the award of a degree in any other university.

Signed____________________________ Date____________________

Joseph Macharia Kinyanjui
H30-0026-2006

This Research Project has been submitted with my approval as University Supervisor.

Signed____________________________________ Date________________
Professor G.S. Namusonge, PhD.
University Supervisor

DEDICATION
This research is dedicated to my late mother Abigail who taught me the value of hard work.

ABSTRACT
The study focused on the role of agricultural finance in the growth of small and medium enterprises located in Machakos district. The study sought to establish the factors that affect the entrepreneurs’ ability access to agricultural finance and what factors determine the source of capital the entrepreneur will chose to finance his/ her enterprise.

The purpose of the study was therefore to find out whether agricultural finance has played any role in MSE growth. The specific objectives of the study were to assess the effect of agricultural finance on MSE growth, review lending procedures of agricultural finance institutions and analyze the major constraints hindering the availability of agricultural finance to SMEs in the study area. The study also sought to evolve policy recommendations that will improve the administration of agricultural finance to small-scale enterprises in Kenya.

An exploratory-descriptive research design was applied in collecting

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