...CHAPTER ONE 1.0 INTRODUCTION 1.1 Background of Study MFIs’ are recognized and acknowledged as vital and significant contributors to economic development, employment creation and technological development (mortis 2000). MFI have therefore been given great emphasis in recent times because they are considered as essential actors in achieving social and economic development in both developed and developing countries. Kenya with an estimated population of 29.6 million people and a per capita income of US $260 is categorized by the World Bank to be among the poorest countries in the world (world development report 1992). Kenya’s development challenge therefore remains in finding sustainable poverty eradication strategies. Micro and small enterprises have been seen as one of the strategies that can bring faster development. MFI does therefore play a big role in financing the micro and small enterprises for faster development. MFI’s enterprises are also highly rated for employment creation. They are therefore important in Kenya where unemployment and underemployment are estimated at between 25% and 35% respectively. MFI s’ through the provision of credit influence the type of technology adopted by entrepreneurs and even the rate of technology adoption. Small scale enterprises in the agricultural sector play a big role in providing food, income generation and employment creation. The application of technology is vital in enhancing growth and development of these enterprises. Inflation...
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