Abstract: There are several funding sources utilized by SMEs which include bank loans, Sacco loans, Microfinance institutions, and personal savings, among others. The effects of these sources on the growth of SME vary. This paper explores the effects of Sacco Loan on the growth of SMEs within Juja town, Kiambu County, Kenya. Target population comprises of 60 SMEs within Juja town, and the desired sample size of 52 SMEs is used, Kathuri and Pals (1993). Due to homogeneity amongst the SMEs, cluster sampling is appropriate. The study employs descriptive research design because it portrays accurate responses from targeted owners and managers of SMEs within the target population. Primary data is collected using structured questionnaires and direct interviews. The relationship between the dependent variable (growth of the SMEs) and independent variables (Sacco loan) is determined using Pearson Correlation and descriptive statistics. The study established that source of funding significantly affects the growth of SMEs (p=0.05). Further, it is evident that the Sacco loans harbors great potential of aiding the growth of the SMEs and the study, therefore, recommends that more effort should be directed towards making the Sacco loans available to the SMEs operators at various levels.
Keywords: Small and Medium Enterprise, Savings and Credit Cooperative Society, Funding Source.
Title: Effects of Funding Source on Growth of Small and Medium Enterprises in Kenya: A Case Study of Juja Town, Kiambu County
Author: Koech D. J., Oyugi L. A., Memba F. S.
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
Research Publish Journals
