The impact of micro finance on the Poor in Kenya:A Systematic review of evidence from Kenya

Abstract

This study aims to review qualitative & quantitative researchontheimpactofmicrofinance(especiallymicro-credit) onthepoorpeopleinKenyatoenablepolicy-makers,donors,andpractitionerstounderstandthenatureoftheevidence available.DespitesomeexistingstudiesreviewingtheevidenceoftheimpactofmicrofinanceinSub-SaharanAfrica, asystematicstudyoftheeffectsofmicrofinanceservicesinKenyadoesnotexist.TheKenyanmicrofinanceindustry isconsideredthemostvibrantinAfrica, withapproximatelyKshstwohundred fiftybilliontotalindustryassetsasof 2021.Therefore, this study seeks to find whether or not the microfinance innovation has been a success. To identify relevant literature, a systematic search for evaluations of micro-credit or microfinance in Kenya was conducted on fouronlinedatabases,JSTOR,ScienceDirect,GoogleScholarandEBSCOhost,whichwasthensystematicallystudied andclassified.Keywordswereidentified,andtheinclusion/exclusioncriteriaweredefinedforidentifyingpapers.The findings of these studies were then synthesized byidentifying whether micro-credit had positive, negative, varied or no effects on poverty, along with a narrative synthesis of qualitative findings. The study concluded that rather than makingrich,somepoorweremadepoorerbymicrofinance.Somestudiesestablishedapositiveimpactofpovertyon the poor; however, the effect is not constant and universal across the country. With the commercialization of microfinance,theobjectiveofreachingthepoorestofthepoormaybeflawed.Cashtransferswithnostringsattached might be an impactful intervention against poverty.