Economics, Econometrics and Finance
4 years ago

High lending rates hinder SME growth in Kenya, impacting economy.

European Journal of Business and Management
The Effects of Lending Interest Rates on Performance of SMES in Kenya
Sandra Otieno, Beatrice Kinanu Anyuki, Grace Musa

Paper Summary

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Small and Medium Enterprises (SMEs) in Kenya struggle with high lending interest rates, which hinder their performance. A study conducted in Nairobi CBD found that these high rates directly impact the success of SMEs. By restructuring bank interest rates to be more favorable, SMEs could access loans more easily, invest in their businesses, and improve their overall performance. This could lead to job creation and help Kenya achieve its economic goals outlined in Vision 2030.