FINANCIAL SERVICE ACCESSIBILITY STRATEGIES FOR FARMERS‘ ECONOMIC EMPOWERMENT IN KENYA: A SURVEY OF SMALL-SCALE TEA FARMERS IN KISII COUNTY THOMAS OMBUI NYAKWEBA A THESIS REPORT PRESENTED TO THE INSTITUTE OF POSTGRADUATE STUDIES OF KABARAK UNIVERSITY IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF THE DOCTOR OF PHILOSOPHY DEGREE IN BUSINESS ADMINISTRATION (STRATEGIC MANAGEMENT) KABARAK UNIVERSITY OCTOBER, 2019 DECLARATION The research thesis is my own work, and to the best of my knowledge, it has not been presented for the award of a degree in any other university or college. Signed:------------------------------------------------------------Date-------------------------------------. Thomas Ombui Nyakweba REG NO: GDB/1213/09/13 ii RECOMMENDATIONS To the institute of postgraduate studies: The research thesis entitled ―Financial Service Accessibility Strategies for Farmers’ Economic Empowerment in Kenya: A Survey of Small-Scale Tea Farmers in Kisii County - Kenya‖ and written by Thomas Ombui Nyakweba is presented to the Institute of Postgraduate Studies of Kabarak University. We have reviewed the research thesis and recommend it be accepted in partial fulfilment of the requirement for the award of the degree of Doctor of Philosophy in Strategic Management. Signature……………………………………Date………………………………………. Prof. Gongera George Cooperative University of Kenya Signature……………………………………Date………………………………………. Dr Irene C. Asienga Kabarak University iii COPYRIGHT @ 2019 Nyakweba Ombui Thomas All rights reserved. No part of this Thesis may be reproduced or transmitted in any form by means of either mechanical, including photocopying, recording or any other information storage or retrieval system without permission in writing from the author or Kabarak University. iv ACKNOWLEDGEMENTS I wish to say a big thank you to the following personalities for their support, guidance and contribution to the success of this thesis. First and foremost, my sincere gratitude goes to my supervisors: Prof. George Gongera and Dr Irene Asienga, whose comments, advice, suggestions and encouragement have helped me to complete this thesis successfully. I indeed would not forget to say thanks abundantly to a caring and dedicated Director of Postgraduate Studies Dr Betty Tikoko, who always came to my rescue wherever I had a problem in my work. My sincere thanks - Dr Gitau Kamau (corrections supervisor), Dr John Gathii (Dean School of Business and Economics) and the entire defence panel; the internal and external examiners and readers of my thesis. I cannot forget the contributions made by personalities like Dr Benjamin Onkoba, Ibrahim Gekonde and David Ogega. I wish to say thank you. What would I say to Isaack Ongera, Gabriel Ongeri, and Sister Esther? You are indeed a treasure from God given to me for my success. You played your role and mine perfectly to ensure that this course did not go through any hitch. I will forever be grateful to God for bringing you into my way. Thank you for your consistent care and contribution to my life to ensure that I fulfil my destiny. v DEDICATION This work is dedicated to my parent, brothers and sisters, beloved wife, children and friends. vi ABSTRACT Economic empowerment is an important goal for any Government. Agriculture is the main source of food as well as income of Kenya‘s economy. Various interventions and policies for ease of access to financial service have been carried out by different state and non-state agencies to achieve intermediate goals of enhancing the level of financial service providers, physical proximity, creating favourable economic factors, and addressing cross-cutting social contributory factors such as engendering, financial literacy among others. Therefore, the study was set to investigate the financial service accessibility strategies for economic empowerment in Kenya based on a survey of small-scale tea farmers in Kisii County. It was guided by the Resource-Based View Theory and incorporated the following theories: Financial Inclusion Theory, Classical Theory of Interest Rate, Financial Deepening Theory and Imperfect Information Theory. The study adopted a descriptive research design. Simple random and stratified sampling techniques were used. A sample size of 398 of tea farmers (participants) was studied, which represented all registered KTDA farmers in Kisii County and their several coded and un-coded buying centres. Questionnaires were used to collect primary data and later analysed using SPSS version 20. Descriptive and inferential statistics were used to analysed data as well as establish the relationship between variables and draw conclusions. The key findings using principal component analysis extraction method showed that there was significant positive relationship between the level of financial providers, Physical proximity, economic factors, social factors, the moderating effect of demographic factors on the relationship between financial service accessibility strategies and economic empowerment and the joint influence of financial service accessibility on economic empowerment among small-scale tea farmers in Kisii County –Kenya. It was concluded that the level of access to financial service providers is a significant aspect in enhancing economic empowerment. There is inadequate infrastructure development in the rural areas which affect financial accessibility among tea farmers’ educational level determines tea farmers‘ financial accessibility and the effect of demographic factors. The study recommends that financial institutions should develop financial products that are tailor-made to the needs of tea farmers to increase financial inclusion among farmers and adopt reliable information technology which will enhance financial inclusivity among tea farmers. The national government, through the ministry of lands and the national land commission, should ensure that land ownership challenges are addressed so that those lands can be used for economic purposes which include using the title deeds for securing credit facilities from financial institutions to enhance their economic welfare. That through collaboration between KTDA and financial institutions, tea farmers should regularly organise workshops, training on financial literacy to create awareness on financial management and opportunities for their economic empowerment. Suggestions are proposed for further research in financial service access strategies that can economically empower farmers in Kisii County and the same to apply to other counties in Kenya and Africa as a whole; including political, cultural behaviour and climatic changes. KEYWORDS: Financial Accessibility Strategies, Economic Empowerment, Financial Providers, Economic factors, Physical factors, Social factors, Tea farmers. vii TABLE OF CONTENTS DECLARATION..................................................................................................................... ii RECOMMENDATIONS ....................................................................................................... iii COPYRIGHT ......................................................................................................................... iv ACKNOWLEDGEMENTS ....................................................................................................v DEDICATION........................................................................................................................ vi ABSTRACT ........................................................................................................................... vii TABLE OF CONTENTS .................................................................................................... viii LIST OF TABLES ............................................................................................................... xiv LIST OF ACRONYMS ..................................................................................................... xviii OPERATIONAL DEFINITION OF KEY TERMS ...........................................................xx CHAPTER ONE ......................................................................................................................1 1.1 Background of the study ................................................................................................1 1.2 Statement of the problem .................................................................................................7 1.3 Broad objectives of the study ...........................................................................................7 1.3.1 Specific Objectives ...................................................................................................8 1.4. Hypotheses ......................................................................................................................8 1.5. Justification of the study .................................................................................................8 1.7 Scope of the study ..........................................................................................................10 1.8 Limitations and delimitations of the study .....................................................................11 CHAPTER TWO ...................................................................................................................13 LITERATURE REVIEW .....................................................................................................13 2.1 Introduction ....................................................................................................................13