Author: John Kiplangat Ngeno
Business Administration Department
Faculty of Commerce, Catholic University of Eastern Africa
Abstract
This research proposal sets out to establish the influence of MFI credit terms and performance of SMEs in Eldoret Town. The study will be guided by the following objectives; To determine the effect of collateral on capital size of small enterprises, to examine the relationship between loan period and return on capital employed Liquidity level, net profit margin and turnover, to examine the effect of interest rates on the return on capital employed, net profit margin, liquidity level and turnover, to determine the effect of loan size on the return on capital employed, Liquidity level and the turnover. Cross-sectional correlation design will be used and a sample of 356 respondents will be adopted. The respondents will be chosen from the SME owners operating in Eldoret Town. The data collected will be entered using Microsoft Excel and then exported to a statistical package for social scientists (SPSS) for analysis. This will generate frequency tables for demographic and descriptive data. The relationship between the study variables will be established using chi square and correlation tests at 95% significant level. Regression analysis will be used to determine the prediction potential of the model. The Model will be; Y=a+β1X1+β2X2+β3X3+β4X4+ε
Keywords: Credit Lending Terms, Microfinance Institutions, Financial Performance, Small and Medium Enterprises