Cost of obtaining financial capital as a determinant of establishment and growth of Micro and Small Enterprises among metal fabricators in Mombasa County
Abstract
The purpose of the study was to establish the cost of obtaining financial capital as a determinant of establishment and growth of Micro and Small Enterprises (MSEs) among metal fabricators in Mombasa County. The study was delimited to Micro, Small and Medium Enterprises in in Mombasa County. The study targeted a population of 240 and a sample size of 72 respondents. Descriptive research design method was applied. Data collection was done by a questionnaire with a pilot test questionnaire conducted in Shimanzi ward of Mombasa County to boost reliability of the research instrument. The study has established that high cost of obtaining financial capital negatively affects the on growth of MSEs. Therefore, the alternative hypothesis is accepted. As a result, it can be concluded that the cost of financing has a significant relationship with establishment of MSEs in Mombasa County. The study has established that high cost of obtaining financial capital negatively affects the on growth of MSEs. The study concluded that high cost of obtaining financial capital negatively affect the initiation and growth of MSEs in Mombasa County. The study recommended that to mitigate on high cost of obtaining financial capital, clear loaning policies should be adopted to avoid misunderstanding on expectations on repayment period. Additionally, the interest rate charged on the borrowed loan should be subsidized by both the national and county governments.
Keywords: Cost of obtaining financial capital, Establishment and growth of MSEs
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