Access to Microfinance and Financial Training for Innovative Urban Sustainability

Musau Mutisya

Description

The Kenyan population is highly concentrated in urban centres, leading to increased social, economic and environmental strains, with a significant percentage of urban dwellers living in sprawling slums. Urban development is increasingly a major focus, especially in the fight against urban sustainability problems. There is little practical orientation in the academic literature for the growing gap between the rich and poor. Current literature is enormously concerned with resource use and environmental pressures, paying scant attention to the nexus between urban sustainability and empowerment of the urban poor. This book initiates debates on the segment of urban population often referred to as �the bottom of the pyramid (BOP)�, by analysing the microfinance innovation following evaluation of the impacts of access to microfinance and financial training and the implications to urban sustainability in Kenya. The main conclusion reached is that microfinance has an instrumental role to play in promoting sustainable urban development as it supports social welfare improvement and increases the livelihood of participants, business development and urban sustainability to a certain extent, thereby empowering the urban poor in contributing to poverty alleviation.

Informations

• Publié par: Langaa RPCIG
• Date de parution: 06 octobre 2014
• Nombre de lectures: 1
• EAN13: 9789956792054
• Langue: English
• Poids de l'ouvrage: 5 Mo

Extrait

ACES TO MICROFNACE AND FIANCL TRING FOR INOVATIE URBAN SUTAINBLITY: Coletiv Inestmns at the Botm of the Pyramid Segmnt i Urban Keya

Emanuel Msau Mtisya

Access to Microfinance and Financial Training for Innovative Urban Sustainability: Collective Investments at the Bottom of the Pyramid Segment in Urban Kenya

Emmanuel Musau Mutisya

Langaa Research & Publishing CIG Mankon, Bamenda

Publisher: LangaaRPCIG Langaa Research & Publishing Common Initiative Group P.O. Box 902 Mankon Bamenda North West Region Cameroon [e-mail] www.langaa-rpcig.net Distributed in and outside N. America by African Books Collective [e-mail] www.africanbookcollective.com ISBN: 9956-792-87-X ©Emmanuel Musau Mutisya 2015

DISCLAIMER All views expressed in this publicatio n are those of the necessarily reflect the views of Langaa RPCIG.

author and do not

Dedication

To my dear family, My wife and children, I dedicate this professional achievement to you. Without your love, support and understanding, I would not have been able to successfully achieve my goal.

Table of Contents List of Tables………………………………………….…. ix List of Figures……………………………………….…… xi List of Pictures……………………………………………. xiii List of Abbreviations………………………………………xv Overview……………………………………………...…….xix 1. Introduction……………………………………………. 1 Theoretical Background…………. ……………..…………. 7 Problem Statement …………………………………...….... 11 Research Objectives ………………………………….……. 14 Research Questions …………………………………...……. 15 Key Concepts…………………………………………..…... 17 Thesis Disposition……………………………………..…… 19 2. Literature Review……………………………………….27 Rapid Urbanization and the Growth of Slums……………… 27 Rapid urbanization in Kenya: Historical perspectives and current realities……………………………………………... 28 Growth of slums and current approaches to slums Development……………………………………………….. 36 Government initiatives on urban development policy……… 39 Community participation for urban sustainability…………... 42 Microfinance for Sustainable Urban Development in Kenya……………………………………………………… 43 Overview of microfinance in Kenya……………………….. 46 Determinants and challenges of microfinance……………… 55 The role of microfinance in urban development……………. 58 Microfinance and training…………………………………... 59 Microfinance and doing business in Kenya…………………. 63 Microfinance and private-public collaboration on urban service delivery……………………………………………………... 67 Strategic policy impacts of microfinance and training………. 72

v

Summary…………………………………………………… 76 3. A Description of Reality: The Case Of Kibera Slum….81 The City of Nairobi………………………………………… 81 Informal Settlements in Nairobi City……………………….. 83 Dynamics of Informal Settlements - the Case of Kibera Slum………………………………………………………... 88 Sustainability Challenges in Kibera slum…………………… 95 Players and Actors in Kibera slum………………………….. 109 Public Services and Infrastructural Development in Kibera Slum………………………………………………………... 119 Microfinance Institutions, Projects and Programs in Kibera Slum………………………………………………………... 121 The Role of BOP Segment in Kibera Slum Development….. 128 Summary…………………………………………………… 131 4. Statistical Analysis Of Microfinance In Kibera Slum.... 135 Methodology……………………………………………….. 135 Data………………………………………………………... 136 Focus groups for qualitative assessment……………………. 136 Administration of questionnaires…………………………… 137 Monitoring and intervention……………………………….. 139 Empirical Analysis…………………………………………. 143 Choice of impact evaluation method………………………. 145 The PSM-DD approach……………………………………. 147 Double Difference estimation……………………………… 149 Research Findings………………………………………….. 150 Distribution and summary statistics………………………… 151 Impact of access to financial services………………………. 159 Impacts of financial training………………………………... 170 Discussions of Impacts of Access to MF and Financial Training…………………………………………………….. 179 Access to MF results……………………………………….. 179 Access to financial training results………………………….. 180 Summary…………………………………………………… 182

vi

5. Collective Investment Model For The Urban Bop Segment……………………………………………………187 The Collective Investment model: A Viable Alternative……. 188 Empirical Evidence from Kibera Slum……………………... 192 The Case of K-Rep Bank Water and Sanitation Project…….. 195 CIM Financial Structure for Urban BOP…………………… 197 CIM for Integrated Sanitation in Slums…………………….. 199 Multiple Benefits…………………………………………… 203 Summary…………………………………………………… 205 6. Conclusions and Implications………………………… 209 Conclusions………………………………………………... 209 Research Implications……………………………………… 213 Implications for business and policy……………………….. 213 Implications for sustainability………………………………. 214 Research limitations………………………………………... 216 Suggestions for further research……………………………. 216 Cited References………………………………………….. 219 Appendixes………………………………………………... 239

vii

viii

List of Tables

Table 1: Distribution of Urban Population in Kenya by Size of Urban Centre.....................................................................................30 Table 2: Financial Regulation Infrastructure in Kenya...............48 Table 3: Projects by the Government and International Organizations in Kibera Slum........................................................ 115 Table 4: Projects by NGOs, CBOs, and FBOs in Kibera Slum................................................................................................... 117 Table 5: K-Rep's Financial Arrangements................................... 123 Table 6: Selected Microfinance Projects, Programs, and Policies on Sustainable Urban Development in Kenya................................. 127 Table 7: Summary Statistics Based on Poverty Levels............. 145 Table 8: Descriptive Summary Statistics...................................... 151 Table 9: Estimating the Propensity Score for access to MF..... 160 Table 10: Description of the Estimated Propensity Score in Region of Common Support....................................................................... 161 Table 11: Inferior Bound, the Number of Treated and the Number of Controls for Each Block............................................................ 161 Table 12: Impact of Access to Financial Services on BOP Households....................................................................................... 164 Table 13: Impacts of Access to Financial Services on Business Outcomes.......................................................................................... 165 Table 14: Impacts of Access to Financial Services on Financial Institutions........................................................................................ 167 Table 15: Impacts of Access to Financial Services on Sustainability Development.................................................................................... 169 Table 16: Estimating the Propensity Score for Financial Training............................................................................................. 171 Table 17: Description of the Estimated Propensity Score in Region of Common Support....................................................................... 172 Table 18: Inferior Bound, the Number of Treated and the Number of Controls for Each Block............................................................ 173 Table 19: Impact of Financial Training on BOP ix