Micro Finance Institution Services and Performance of Restaurants in Mombasa County, Kenya
Authors: Aberi Jared Martyrious , Ng’ang’a Peter 
Published: April 2023

The expansion of the economy depends on the availability of financial services, notably credit and savings options. As a result, Kenya's economy has not grown and developed as expected as a result of MSMEs. Medium and Small entities encounter several weaknesses that hinder their potential usefulness towards long-term sustainability of the economy. The lack of credit services is one of these concerns. The efforts of microfinance institutions to make their services available to small and medium-sized businesses that have not profited from the traditional formal banking system have been recognized as a result of the growth and expansion of SMEs. Because of this, the researcher evaluates how microfinance services affect the performance of restaurants in Mombasa's core business district. Researchers hope to learn how microfinance training affects the performance of Mombasa CBD restaurants; how the regulatory framework for microfinance affects Mombasa CBD restaurants; whether access to credit affects Mombasa CBD restaurant performance; and the impact of microfinance credit cost on Mombasa CBD restaurant performance. The study was based on Balance Scorecard theory, Resource-based theory, Pecking order theory, Credit Access theory and Management theory. A descriptive survey design was used in this investigation for restaurants over seven years and above. 114 people who   worked at the selected restaurants in Mombasa's core business centre were selected whereby, 57 of whom were managers and 57 were waiters. The researchers used the census approach, in which all employees were included. The study data was through questionnaires. Statistical Package for Social Science (SPSS) Version 25 for Windows was used for data analysis. In order to get the most accurate results, we used a variety of statistical methods such as means, frequency tables, percentages, standard deviations correlation and regression. The study found that training and microfinance regulatory framework indicated an insignificant relationship with performance of restaurants in Mombasa County however access to microfinance credit and microfinance credit cost indicated a positive significant relationship with performance by SMEs in Mombasa County. The study concluded that Owners of businesses can benefit from training in the form of expanded professional networks, the transfer of technology, the formation of new businesses, and the acquisition of superior management practices. Business success and continued operation depend on the availability of debt financing. However, MFIs are hesitant to lend to SMEs because they are seen as higher risks and SMEs typically do not have collateral to back up their loans. The study also concludes that the amount of the loan is a crucial factor in microfinance lending since it affects the overall cost of financial intermediation. The study recommends that Microfinance institutions should continue training restaurant owners on financial management for the purposes of sustaining enterprises. This will create better understanding on how to manage their funds more efficiently and effectively. In order to make it easier MFIs to have favorable financial performance, the institutions ought to adopt methods that will make it easier for MFIs to have improved liquidity. This will allow the institutions to be more efficient in their financial operations. The study also recommends that microfinance institutions and policymakers should think about incorporating an affordable micro-insurance plan as part of the microfinance package for all its clients who seek for loans. Small and medium-sized enterprise management should be more proactive in approaching MFIs to analyze their business progress and share their current needs and concerns.