Determinants of Table Banking Loan Utilization among Micro Agri-Enterprises Owners in Bomet County, Kenya

Abstract

Micro Agri-enterprises (MAEs) play a key role in economic development of Kenya. However, without finance they need to invest, their performance is stifled. Table banking (TB) strategy is an avenue through which MAE owners pool finances together, access credit and business development services. The study objective was to determine factors influencing utilization of table banking loans among MAE owners participating in table banking in Bomet County. Multi-stage sampling technique was used to select a sample of 382 MAE owners who borrowed long-term loans between 2015 and 2016 from TB groups promoted by Joyful women organization (JoyWO). Semi-structured questionnaires were used to collect primary data. Utilization of TB loans was measured by the amount of TB loan invested in MAE to the total amount of loan borrowed from TB within the study period. Two-limit Tobit model was used to analyse data. Entrepreneurship training received from TB program officers was found to have a positive and significant influence on utilization of TB loans. Location of agri-enterprise, agri-enterprise age and size were other factors found to influence utilization of TB loans positively and significantly. However, gender of MAE owners was found to have a negative and significant influence on utilization of TB loans. To boost utilization of table banking loans among MAE owners, table banking programme officers should tailor entrepreneurship and agribusiness trainings to meet the specific needs required by MAEs owners operating at different stages in the agricultural value chain.

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