Umulkulthum Musa Yeya, Dr. Wahida Bana & Dr. Abdullah Ibrahim Ali

Abstract

Financial inclusion has been identified as a critical component for micro, small and medium enterprises to thrive in their efforts to increase productive capacity, compete, generate jobs, and contribute to poverty alleviation in developing nations. The study’s goal was to examine the relationship between financial inclusion and financial health of blue economy micro, small and medium enterprises in coastal region of Kenya. All activities aimed at making financing a reality for less privileged population are referred to as financial inclusion. In line with previous studies, a lack of financial inclusion is nearly generally identified as a major issue for micro, small and medium-sized enterprises necessitating research on the relationship between financial inclusion and financial health of these MSMEs targeting those in blue economy. The following variables guided the study: financial accessibility and financial services usability where the study evaluated the relationship between these independent variables with financial health of the MSMEs as the dependent variable. The study was guided by the public good and dissatisfaction theories of financial inclusion. The study embraced descriptive research design and data was drawn was a population of 81,000 MSMEs. A total of 380 blue economy sector micro, small and medium firms were sampled using stratified random sampling, technique. Cronbach’s alpha was used to examine instrument reliability. A pilot study of 10% of sampled units of analysis was carried out to determine the suitability of the tools. Two main components of the tools were measured; reliability and validity; with a Cronbach’s alpha values of more than 0.6 indicating that the tool is reliable and all the P values were less than 0.05 hence validity of the tool. Factor analysis was used to determine sample adequacy, elements of financial accessibility and financial service usability and financial health were taken and the results of the KMO value obtained were; 0.677, 0.530, and 0.539, respectively. Both descriptive and inferential statistics were used to analyze the data.

Key words: Blue Economy MSMEs, Financial Accessibility, Financial Service Usability, Financial Health, Coastal region Kenya.