Regulatory Framework and Demographic Determinants of Acquisition of Financial Services by MSEs in Nairobi County, Kenya
Fredrick W.S. Ndede (PhD), Martin Otieno Mbewa (PhD), Jagongo Ambrose (PhD)

Abstract
Micro and Small Enterprises have been known for their crucial role in creation of employment, income generation and supplementing the provision for goods and services by large enterprises as well as eradication of poverty. They contribute to the creation of wealth and support to the development and growth of medium and large scale enterprises. The failure of MSEs to recognize the important role played by external sources of finance usually poses a serious challenge to their functions. Since MSEs regularly suffer serious financial constraints, they are yet to realize their full potential as agents of economic growth. In Kenya for example, the failure rate of MSEs is still as high as 65 percent. This paper examined the regulatory framework and demographic determinants of acquisition of financial services by MSEs in Nairobi County, Kenya. Descriptive study design was used with a target population consisting of 2,098 MSEs. Primary data was collected using semi-structured questionnaires from a sample of 250 respondents. Data was analysed using descriptive and inferential statistics. The study concluded that the majority of the businesses are owned and managed by youthful individuals with an average age of 34 years and that source of initial capital, maintenance of insurance for the business, age of the business owner/manager and need for maintenance of bank accounts are important factors in acquisition of financial services. Key words: acquisition, financial services, MSEs, Regulatory framework and demographic factors.

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