ACCESS TO FINANCE BY SPECIAL GROUPS AND IMPLEMENTATION OF PREFERENCE AND RESERVATION SCHEME IN TERTIARY INSTITUTIONS

Timothy Thuita Mwangi

School of Business Management and Economics

Dedan Kimathi University of Technology, Kenya

Dr. David Kiarie

School of Business Management and Economics

Dedan Kimathi University of Technology, Kenya

Dr. Pamela Nyaboke

School of Business Management and Economics

Dedan Kimathi University of Technology, Kenya

CITATION: Mwangi, T., T., Kiarie, D., Nyaboke, P. (2018). Access to Finance by Special Groups and Implementation of Preference and Reservation Scheme in Tertiary Institutions. International Journal of Economics and Finance. Vol. 7 (4) pp 21 – 32.

ABSTRACT

The study’s purpose is to examine how access to finance by special groups affects implementation of preference and reservation scheme in Tertiary institutions in Nyeri County. The study was guided by institutional theory and empowerment theory to understand the concept behind preference and reservation scheme in public procurement and its implication in empowering disadvantaged groups. Descriptive study design was adopted for the study. The target population comprised 147 respondents drawn from staff working in the procurement function, finance department, head of departments regularly involved in tender evaluation, registered suppliers, and prequalified tenderers in Tertiary Institutions from whom a census was done. A pilot study was done at Michuki Technical Training Institute to enable refining the research instrument for clarity. Cronbach Alpha coefficient with a value of 0.70 or more than was considered to designate that the instrument is reliable. The study achieved a response rate of 89.8%. Data analysis was conducted using statistical package for social sciences (SPSS) to generate descriptive and inferential statistics. Bivariate regression analysis was done to establish relationship of the independent variables in the study. The study findings revealed that access to finance by special groups had positive and significant effect on implementation of preference and reservation scheme. In addition, most of the special groups face major challenges and constraints in accessing funding to enable them supply goods and services even after being issued with LPO/LSO as the banks takes time to lend this clientele base due to their unique characteristics who pose a high risk of default. These include lack of securities and credibility (for debt financing), lack of existing business, lack of personal savings and resources, low credit-scoring among others. The study recommends that government should develop intervention strategies or policies to ensure easy access to fund by special group to enable them participate in public procurement.

Key words: Access to Finance, Special Groups, Implementation of Preference and Reservation Scheme and Tertiary Institutions

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