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Micro and small enterprises (MSEs) play a big role in social economic development in terms of employment creation and their significant contribution to the economy’s output of goods and services (Muthuri 2011). The Economic Survey (2006) states that the sector contributed over 50% of the new jobs created in 2005. Despite their significance, past statistics indicate that three out of five businesses fail within the first few months of operation (Kenya National Bureau of Statistics, 2007).The Government, private institutions and NGOs have come up with interventions like Table Banking to boost the performance of these enterprises. However, according to the 4th Annual Progress Report 2011-2012 (2013), the effect this concept has had on MSEs has not been determined. Consequently, this study aimed at delving deeper into this subject and coming up with a comprehensive report on it. The target group population was 2,340 Table Banking Group members in Nairobi managed by Maono Initiative, Joyful Women and SMEI. A sample of 10% was drawn using stratified random sampling technique to get a sample size of 234 respondents. Primary data was collected through self-administered questionnaires and individual interviews conducted where gaps in data collection were found. The study revealed that Table Banking has increased ease of access of credit for micro and small enterprises who would normally not qualify for credit from formal financial institutions. It also revealed that Table Banking groups are lacking in capacity building, technology transfer and market linkages of the members. However, it was evident that social capital was a key component of Table Banking with mentorship, accountability and loan guarantee being the major benefits brought out by the respondents. Challenges of being in such groups were also not lacking, the major ones being non-serious members and loan defaulting. Nevertheless, 95% of the entrepreneurs involved in this study confidently said that their businesses had grown in terms of profitability, customer base, product diversification and asset base. In fact, the study revealed that most businesses in Table Banking Groups are between 0 and 2 years and by the time they hit their 3rd year, they are slowly outgrowing the groups; at this stage, they need bigger loans and more sophisticated technologies and trainings in order to grow further. The study recommends that proper structures and policies be put in place by the Government to ensure that these groups are nurtured so well that they do not fall out of the group as they grow. The study also recommends that further research is done on how other countries run this concept and how Kenya can make the concept work better for micro and small enterprises.


Key Words: Table Banking Group, Micro and Small Enterprises

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