MICROFINANCE SERVICES AND FINANCIAL EMPOWERMENT OF WOMEN CLIENTS OF KENYA WOMEN MICROFINANCE BANK IN NAKURU COUNTY, KENYA

International Journal of Research in Management ISSN 2249-5908 Available online on http://www.rspublication.com/ijrm/ijrm_index.htm Volume 15 No. 5, 2025 DOI: 10.5281/zenodo.17780819 Original Article ©2025 RS Publication, [email protected] 109 MICROFINANCE SERVICES AND FINANCIAL EMPOWERMENT OF WOMEN CLIENTS OF KENYA WOMEN MICROFINANCE BANK IN NAKURU COUNTY, KENYA 1 Judith Andesia, 2 Yasin Kuso Ghabon Faculty of Business and Economics, Maseno University, Kenya ARTICLE INFO ABSTRACT ©2025 RS Publication Paper ID: IJRM6926F926B3FE0 Published: 2025-12-01 DOI: https://dx.doi.org /10.5281/zenodo.17 780819 Page No: 109-124 This study examined the effect of microfinance services on the financial empowerment of women clients of Kenya Women Microfinance Bank (KWFT) in Nakuru County, Kenya. Anchored in Kabeer’s Empowerment Theory, the research adopted a quantitative correlational design. The target population comprised 1,142 active women clients who had completed at least three loan cycles. Yamane’s formula yielded a sample of 298 respondents, with data collected via structured questionnaires achieving an 82% response rate (n=244). Results indicated a strong positive and statistically significant relationship between microfinance services and financial empowerment (r=0.748, p<0.01). Regression analysis revealed that microfinance services accounted for 56.0% of the variance in financial empowerment (R²=0.560). The regression coefficient (β=0.748, p<0.001) demonstrated that a one-unit increase in microfinance services results in a 0.748-unit increase in financial empowerment. The study concludes that group lending and credit training drive empowerment, whereas savings access and loan terms are constrained by infrastructural limitations. Recommendations emphasise digital enhancements and adaptable policies. Limitations include the cross-sectional approach and county focus, advocating for longitudinal and multi-regional studies. Keywords: Microfinance, Services, Financial Empowerment, Women, Clients I. INTRODUCTION 1.1 Background of the Study In many rural and urban fringe communities, women's daily engagements in small-scale activities such as vegetable selling, poultry keeping, and tailoring provide essential income for families, yet these efforts seldom lead to lasting financial independence because of limited access to capital and INTERNATIONAL JOURNAL OF RESEARCH IN MANAGEMENT Available online on http://www.rspublication.com/ijrm/ijrm_index.htm ISSN 2249-5908 Cite This Paper: Judith Andesia and Yasin Kuso Ghabon (2025). "MICROFINANCE SERVICES AND FINANCIAL EMPOWERMENT OF WOMEN CLIENTS OF KENYA WOMEN MICROFINANCE BANK IN NAKURU COUNTY, KENYA ". INTERNATIONAL JOURNAL OF RESEARCH IN MANAGEMENT (IJRM), vol. 15, no. 6, 2025, pp. 109124. DOI: https://dx.doi.org/10.5281/zenodo.17780819 International Journal of Research in Management ISSN 2249-5908 Available online on http://www.rspublication.com/ijrm/ijrm_index.htm Volume 15 No. 5, 2025 DOI: 10.5281/zenodo.17780819 Original Article ©2025 RS Publication, [email protected] 110 markets (World Bank, 2023). Such constraints not only affect individual livelihoods but also hinder family well-being, as women often prioritise immediate needs over long-term investments like education or health. Microfinance has emerged as a practical solution, offering financial products designed for low-income groups to help women build skills and assets gradually (African Development Bank, 2024). In sub-Saharan Africa, where women make up over 50% of the population but hold less than 20% of formal financial accounts, microfinance institutions play a key role in closing this divide by providing loans, savings options, and training tailored to women's realities (Central Bank of Kenya, 2024). Kenya stands out in the region, with its microfinance sector growing rapidly from 15 licensed entities in 2020 to 60 by 2025, supported by policies like the National Financial Inclusion Framework that aim to reach 80% of adults by 2028 (Kenya National Bureau of Statistics, 2024). Institutions focus on group-based models to reduce risks and build trust, particularly for women excluded from traditional banks due to lack of collateral. Narrowing to Nakuru County, a vital agricultural area with diverse farming and trading opportunities, microfinance supports about 52% of women in informal businesses, from milk vending to craft making, but challenges like poor roads and unreliable electricity often delay service delivery (County Government of Nakuru, 2024). Kenya Women Microfinance Bank (KWFT), founded in 1981 and now serving 1.7 million women nationwide, operates 26 branches in Nakuru, disbursing KSh 20 billion yearly in group loans averaging KSh 40,000, alongside required savings and monthly training sessions (KWFT, 2024). Despite this reach, local reports show inconsistencies: 65% of clients experience short-term income boosts, but only 32% report increased asset control, such as owning livestock or tools, due to cultural barriers like maledominated land ownership and seasonal income fluctuations (Ministry of Public Service, Gender and Youth Affairs, 2020). This study focuses on how KWFT's core services loan provision for quick funds, savings access for security, credit training for knowledge, and group lending for support affect financial empowerment through measures like asset ownership, savings capacity, credit access, and business growth. By targeting clients with at least three loan cycles, who offer insights into ongoing impacts, International Journal of Research in Management ISSN 2249-5908 Available online on http://www.rspublication.com/ijrm/ijrm_index.htm Volume 15 No. 5, 2025 DOI: 10.5281/zenodo.17780819 Original Article ©2025 RS Publication, [email protected] 111 the research addresses gaps in Nakuru's mixed economy, where urban influences meet rural hardships. Such analysis supports Kenya's Women Economic Empowerment Strategy 2020-2025, which seeks to lift 500,000 women out of poverty via financial tools, providing evidence for bettertargeted programmes in developing contexts (Ministry of Public Service, Gender and Youth Affairs, 2020). Through a funnel from everyday struggles to institutional strategies, the study highlights pathways for sustainable change. 1.2 Statement of the Problem Although KWFT has expanded in Nakuru, financial empowerment for its women clients appears inconsistent, with many stuck in small, repeated loans without building meaningful savings or expanding businesses, leading to a 24% dropout rate after three cycles from strict repayment schedules and limited training amid logistical issues like distant branches (KWFT, 2024). County surveys indicate 58% of women business owners face funding and skill shortages, yet the true contribution of microfinance remains unclear: loans meet urgent demands, but lasting gains in assets evade 53% of users (County Government of Nakuru, 2024). The main aim of this study was to determine the effect of microfinance services on the financial empowerment of women clients of Kenya Women Microfinance Bank in Nakuru County, Kenya. II. LITERATURE REVIEW 2.1 Theoretical Review Kabeer’s Empowerment Theory, developed by Naila Kabeer in 1999, views empowerment as a process of change through which those who have been denied the ability to make choices acquire such ability, focusing on women's strategic life decisions in unequal societies. Kabeer identifies three interconnected dimensions: resources (access to economic opportunities and knowledge), agency (the capacity to define one's goals and act upon them), and achievements (the outcomes of these actions, such as improved well-being). This approach challenges traditional development models by emphasising expansion of choice rather than just resource distribution, arguing that true empowerment involves bargaining power and voice within social structures (Kabeer, 2020). International Journal of Research in Management ISSN 2249-5908 Available online on http://www.rspublication.com/ijrm/ijrm_index.htm Volume 15 No. 5, 2025 DOI: 10.5281/zenodo.17780819 Original Article ©2025 RS Publication, [email protected] 112 In microfinance literature, the theory explains how services like loans provide resources, training builds agency by enhancing financial understanding, and group lending strengthens collective bargaining against household inequalities, leading to achievements like business sustainability. Widely adopted in gender studies, it has influenced tools such as the Women's Empowerment in Nutrition Index, highlighting its practical value in linking financial access to broader life improvements (Alkire et al., 2022). However, critics argue that the theory over-relies on individual agency, potentially ignoring systemic barriers like legal discrimination against women in property rights, which can make resource gains temporary; in group settings, it may also overlook how peer pressure reinforces conformity rather than genuine choice (Salia et al., 2020). Recent adaptations incorporate digital factors, recognising how technology can amplify or hinder agency in lowconnectivity areas (Kabeer, 2020). This study draws on Kabeer’s framework to link KWFT's services to empowerment indicators: loan provision and savings as resource bases, credit training as agency development, group lending as bargaining platforms, all aiming for achievements in assets and growth. In Nakuru's context, marked by 37% rural illiteracy and patchy infrastructure, the theory predicts moderated effects, where group support thrives but savings falter without reliable access, calling for blended solutions (Lompo & Mwanzia, 2025). It guides the analysis to explore unintended outcomes, like debt burdening agency, ensuring a holistic view. Thus, Kabeer’s theory not only structures the research but also critiques superficial interventions, advocating for context-specific adaptations in developing economies (Ashraf et al., 2022). Organisations like the World Health Organization endorse similar approaches in their gender and health frameworks, where empowered women use financial resources for better nutrition and preventive care, mirroring this study's potential spillovers to family health in Kenyan communities (World Health Organization, 2023). 2.2 Empirical Review Research on microfinance and women's empowerment in Kenya presents a varied picture, with studies highlighting the strengths of group-based and skill-focused services while pointing to weaknesses in savings and loan flexibility, especially in areas with limited infrastructure. A study by Odunga (2024) explored how microfinance aids women groups in marginalised Kenyan International Journal of Research in Management ISSN 2249-5908 Available online on http://www.rspublication.com/ijrm/ijrm_index.htm Volume 15 No. 5, 2025 DOI: 10.5281/zenodo.17780819 Original Article ©2025 RS Publication, [email protected] 113 settings, interviewing 384 participants to find that group lending created strong support networks that helped during tough times like droughts, allowing nearly half to start new crafts; however, training was seen as helpful for home discussions on money but too rare, and savings felt like a forced cost rather than a benefit, with over half viewing it as an extra load. In a related investigation, Lompo and Mwanzia (2025) looked at lending's role in Nakuru's informal areas, gathering stories from 210 women to show how loans helped grow small shops, but weekly payments clashed with irregular work, causing stress for about a third; training brought new ideas on budgeting, but family men taking the money reduced benefits for over a quarter, suggesting the need for family involvement sessions. Turning to training's impact, Lawrence and Letuya (2021) examined 300 herders in Narok, using before-and-after accounts to reveal a 26% rise in negotiation skills after sessions on loan costs, which led to better spending on family needs like school fees; yet, moving lifestyles made attending hard, a pattern echoed in Oluoch and Okello's (2025) work with 280 businesswomen in Homabay, where training improved payment habits but was criticised for being too bookish instead of practical for market pricing. Group lending's value comes through clearly in Ndwiga and Karugu's (2023) analysis of 250 fund users in Nairobi, where personal stories showed 38% feeling more empowered from friends checking spending, leading to buys like tools or land; mixed groups sometimes caused trust issues, leaving one in five out. Loan giving's mixed side appears in Mwebia's (2023) Nyamira study of 240 women, where loans started chicken farms for 44%, but high rates in low seasons brought sadness for some, stressing the importance of safety nets. On the wider African front, Salia et al. (2020) studied 320 small business owners in Ghana, finding loans freed 35% for new work but family sharing cut 23% of gains, calling for full reviews. Ashraf et al. (2022) talked to 48 rural women in Pakistan, similar to Kenya's informal life, and saw training spark talks on money but weekly trips blocking savings, a main theme for 68%. Njoroge (2025) mapped lives of 190 in Meru's savings groups, with 48% crediting loans for starts but 29% stuck without bigger bonds, groups helping through shared stories. Mwangi (2024) added social layers to 260 in Kakamega, showing learning boosting training in record-keeping but rules blocking 24% International Journal of Research in Management ISSN 2249-5908 Available online on http://www.rspublication.com/ijrm/ijrm_index.htm Volume 15 No. 5, 2025 DOI: 10.5281/zenodo.17780819 Original Article ©2025 RS Publication, [email protected] 114 of wins. Wanjala (2025) connected money reach to 36% self-reliance in Kakamega, with city-rural gaps 65% versus 40% use showing tech shortfalls. Zakaria (2023) praised phone money's African story, easing 29% loan flow by cutting fees, fitting KWFT's links but held back by 35% women's caution with apps (Central Bank of Kenya, 2024). Osei-Assibey (2025) saw skill as a link in Ghana's 270, weaving loans into better work. Van Rooyen et al. (2021) tracked 430 South Africans, loans drawing 20% asset paths but 25% worry notes at high costs, tied to cushions. Duflo (2021) reviewed 10 weak-area works, group tales beating alone by 14% in wins, training's rhythm key. These works praise microfinance's people links as power builders, but lament money-side slips payment stiffness, reach dryness in weak places, urging mixed stories for Kenya's women to tell success tales (Ministry of Public Service, Gender and Youth Affairs, 2020). 2.3 Research Gaps Despite rich insights from Kenyan microfinance studies, several voids persist that this research fills. Odunga (2024) and Lompo and Mwanzia (2025) offer vivid accounts from coastal and urban poor areas but overlook Nakuru's blend of farm and city life, where weather changes uniquely affect payments. Lawrence and Letuya (2021) and Oluoch and Okello (2025) group signs together without breaking them down, hiding why groups work better than savings in places with 41% rural no-power (Kenya National Bureau of Statistics, 2024). Little work spotlights KWFT's long-term users for lasting views, and recent tech changes since 2024 are not woven in (Zakaria, 2023). This study closes these by giving a full, Kabeer-guided count in Nakuru, making clear proof for better plans. 2.4 Conceptual Framework The independent variable, microfinance services, includes loan provision, savings access, credit training, and group lending. These influence the dependent variable, financial empowerment, through asset ownership, savings capacity, credit access, and business growth. Based on Kabeer’s theory, resources from services lead to agency and achievements, moderated by Nakuru's challenges (Figure 1). International Journal of Research in Management ISSN 2249-5908 Available online on http://www.rspublication.com/ijrm/ijrm_index.htm Volume 15 No. 5, 2025 DOI: 10.5281/zenodo.17780819 Original Article ©2025 RS Publication, [email protected] 115 Figure 1: Conceptual Framework Source: Author (2025) III. RESEARCH METHODOLOGY A correlational design was used to explore links between microfinance services and financial empowerment without changing variables, suitable for real-world settings like KWFT groups. The target population included 1,142 active women clients of KWFT in Nakuru County who had finished at least three loan cycles as of October 2025 (KWFT Administrative Records, 2025). These women, averaging 3.9 cycles from records, give deep views on service use over time. Sample size was calculated using Yamane’s (1967) formula for finite populations: n = N / [1 + N(e²)] where n is the sample size, N is the population (1,142), and e is the margin of error (0.05 at 95% confidence level). Substituting the values: n = 1142 / [1 + 1142(0.0025)] = 1142 / [1 + 2.855] = 1142 / 3.855 ≈ 296 The sample size was then rounded up to 298 to allow even distribution across groups. Stratified random sampling divided the 12 branches into urban (41%), peri-urban (33%), and rural (26%) layers to match population mix and avoid city focus. Microfinance Services Loan provision Savings access Credit training Group lending Financial Empowerment Asset ownership Savings capacity Credit access Business growth International Journal of Research in Management ISSN 2249-5908 Available online on http://www.rspublication.com/ijrm/ijrm_index.htm Volume 15 No. 5, 2025 DOI: 10.5281/zenodo.17780819 Original Article ©2025 RS Publication, [email protected] 116 Data came from structured questionnaires with 16 closed items on a 5-point Likert scale (1=Strongly Disagree to 5=Strongly Agree): eight for services (two per indicator) and eight for empowerment. Items were drawn from past studies and checked by experts. A pilot test with 30 women from a nearby branch gave Cronbach’s alpha of 0.886 for services and 0.894 for empowerment, above 0.7, leading to small changes like clearer words; pilots were not in the main study. Questionnaires were given out and collected later at group meetings from September to October 2025, fitting women's schedules and getting 82% back. Women signed consent forms, knowing they could leave anytime, answers were anonymous with codes, and data was stored safely digital files locked, paper destroyed after entry. SPSS version 28 handled analysis: means and percentages described views, Pearson correlation checked links, and simple linear regression predicted effects using the model: Y = β₀ + β₁X + ε. where Y is financial empowerment, X is microfinance services, β₀ is constant, β₁ is coefficient, and ε is error. IV. RESEARCH FINDINGS AND DISCUSSION 4.1 Response Rate The study targeted 298 respondents from KWFT in Nakuru County. Out of these, 244 questionnaires were successfully filled and returned, representing a response rate of 82 percent. Table 1 presents the response rate achieved in the study. Table 1: Response Rate Response Frequency Percentage Expected 298 100 Received 244 82 Difference 54 18 The findings indicate a satisfactory response rate of 82 percent, which is acceptable for survey research. According to Mugenda and Mugenda (2003), a response rate of 50 percent is adequate, 60 percent is good, and 70 percent and above is considered very good for analysis and reporting. International Journal of Research in Management ISSN 2249-5908 Available online on http://www.rspublication.com/ijrm/ijrm_index.htm Volume 15 No. 5, 2025 DOI: 10.5281/zenodo.17780819 Original Article ©2025 RS Publication, [email protected] 117 Therefore, the 82 percent response rate in this study was sufficient to ensure reliable conclusions could be drawn from the collected data. 4.2 Microfinance Services The study sought to assess the perceptions of microfinance services among women clients at KWFT in Nakuru County as shown in Table 2. Table 2: Microfinance Services Statements SD (%) D (%) N (%) A (%) SA (%) Mean SD Loans from the bank have positively supported my personal or business needs. 4.9 7.4 5.7 46.7 35.3 4.20 0.97 The loan repayment terms benefit me by making repayment manageable. 20.5 24.6 16.8 25.0 13.1 2.98 1.42 Savings services have improved my ability to save regularly. 26.6 29.1 18.0 18.0 8.3 2.48 1.36 Easy access to savings helps me manage financial emergencies. 22.5 26.2 20.1 21.3 10.0 2.61 1.32 Credit training has improved my financial decision-making. 14.8 17.7 13.1 31.1 23.3 3.39 1.34 Training on credit management helps me handle loans responsibly. 12.7 15.6 11.9 33.6 26.2 3.52 1.30 Group lending makes it easier for me to access credit. 2.9 5.3 4.9 45.5 41.4 4.25 0.88 Participation in lending groups improves my loan repayment discipline. 2.5 4.9 5.3 46.3 41.0 4.27 0.86 The study assessed the perceptions of microfinance services at KWFT in Nakuru County. These findings are consistent with Odunga (2024), who found that group lending services reported higher satisfaction among women in marginalised areas. This agreement suggests that the benefits of International Journal of Research in Management ISSN 2249-5908 Available online on http://www.rspublication.com/ijrm/ijrm_index.htm Volume 15 No. 5, 2025 DOI: 10.5281/zenodo.17780819 Original Article ©2025 RS Publication, [email protected] 124 (PEWOSA). African Journal of Economic and Management Studies, 16(2), 112–130. https://doi.org/10.1108/AJEMS-05-2024-0123 Nyang’au, P. (2025). Effect of savings generated after repayment of women enterprise fund on women economic empowerment in Nyamira County, Kenya. Stratford Journal of Accounting, 4(3), 112–130. Odunga, R. M. (2024). Microfinance services and economic empowerment of women groups in marginalized settings in Kenya. 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