ACCESS TO CREDIT AND PERFORMANCE OF SMALL BUSINESS IN MUHANGA DISTRICT A CASE STUDY OF SELECTED SMALL BUSINESS IN MUHANGA DISTRICT FINANCED BY DUTERIMBERE LTD

Abstract

This study called access to credit and performance of small business financed by Duterimbere Ltd in Muhanga District ; therefore, this study analyzed whether access to credit have positively contributed to the performance of small business entrepreneurs thereby empowering them economically. The main objective of this study is to examine the access to credit opportunity as a tool for small business performance. The specific objectives are; to determine the credit terms given to Small and Medium Enterprises by Duterimbere Ltd; to assess credit policies in Duterimbere Ltd ;to examine the profitability of small business enterprise financed by Duterimbere Ltd , to establish relationship between access to credit and performance of small enterprises. This study is of significance to Mount Kenya University and will facilitate the researcher to improve skills, knowledge and experience in the field of credit and small business performance. This research focused on access to credit and carried out in Muhanga District on the case study of small business financed by Duterimbere Ltd , the study concentrated on the period scope of 4 years (2010-2013).The researcher reviewed studies related to access to credit and performance of small business. The research gap has been identified, whereby; other researchers did not focus on rural areas entrepreneurs. The relationship between the variable has been identified through conceptual framework. The study; both primary data and secondary data were used. The targeted population was 86 members of Dufashanye, that is a small businesses from Muhanga District financed by Duterimbere Ltd .The research used census approach, because all 86 Dufashanye members was used.Census method was employed in grouping the small business of the same characteristics into strata. The data collection was done using questionnaire, unstructured interview guide and documentary review. And then, data was processed through editing, coding and tabulation. SPSS was used during data analysis in respect of relevant descriptive and inferential statiscs. This research assessed the credit terms, policies and profitability of Dufashanye. This researcher concluded that in case of non-repayment, a creditor's sale of collateral permits a debtor to recover any demonstrable loss against a deficiency judgment. Such a sale raises a rebuttable presumption that the value of the collateral is at least equal to the amount of the outstanding debt.. It recommended that Rural areas entrepreneurs must minimize all loss caused by credit risk in order to achieve high level of performance in their routine activities. Even if Dufashanye cooperative has access to credit, they need other financial institutions to improve access to credit in Muhanga District.