IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 16, Issue 4. Ver. III (Apr. 2014), PP 83-91 www.iosrjournals.org www.iosrjournals.org 83 | Page Challenges facing women entrepreneurs in accessing business finance in Kenya: Case of Ruiru Township, Kiambu County Phylis Makena, Simon Thiaine Kubaison, Charles Ibuathu Njati. I. Introduction There are various definitions of Small and Medium Enterprises (SMEs), varying between countries and their levels of economic development. The definition is also based on considerations such as the number of employees and revenue levels. In the United States and European Union (EU) countries SMEs are enterprises with employees under 500 while in developing countries any enterprise employing below 100 employees would constitute an SME. In Kenya, Small enterprises are defined as enterprises employing between 1-50 employees, while medium enterprises are those with 51-99 employees (GoK, 1999). Globally, SMEs are believed to play a pivotal role in promoting grassroots economic growth and equitable sustainable development. As SMEs have become essential in the economic matrixes of the nations, increased deliberate government policies and legislation have been witnessed globally, in the government quest to nurture SMEs. It is also estimated that SMEs constitute over 90 percent of total enterprises in most economies with a high rate of employment growth. They are also a vehicle for increased industrial production and exports. For example, in Kenya it is estimated that SMEs contribute over 60 percent in employment and 55 percent to Gross Domestic Product (GDP) (GoK), 2005). The Asian Tigers such as India, Indonesia, China, Malaysia, Japan, and South Korea also have thriving SMEs sectors contributing between 70- 90 percent in employment and an estimated 40 percent contribution to their respective GDPs. It is my view, in the chase of millennium goals, it is extremely vital to re-define the role of SMEs as important economic growth and employment drivers. In African countries, for instance Kenya, it is believed that SMEs face daunting challenges that have always suppressed their robust growth (GoK), 2005). Among these challenges are; lack of managerial expertise, inadequate education and skills, lack of credit, technological change, poor infrastructure and insufficient markets information among others. This has affected the profitability of the SMEs. SME financing is the funding of small and medium enterprises and represents a major function of the general business finance market in which capital for different types of firms are supplied, acquired and costed or priced. Capital is supplied through the business finance market in the form of bank loans and overdrafts, leasing and hire-purchase arrangements, equity/corporate bond issue, venture capital and asset based finance such as factoring and invoice discounting. Women owned businesses are known for their low start-up and working capital. Siwadi and Mhagari (2011), Gen (2003) notes that under normal circumstances, women’s enterprises have low growth rate and are limited potentially due to the type of the business they operate. Women Entrepreneurs In Kenya, women owned businesses account for over 48% of all SMEs (ILO, 2008). Stevenson and St-Onge (2005) contends that there are three profiles of women entrepreneurs operating SMEs in Kenya namely; Jua Kali micro-enterprises, very small micro enterprises and small scale enterprises. These are differentiated by their demographic profiles, extent of previous business experience, needs, access to resources and growth orientation. The bulk of women entrepreneurs in Kenya operate enterprises associated with traditional women’s roles such as, hairstyling, restaurants, hotels, retail and wholesale outlets (ILO, 2008). Women owned enterprises are making a significant contribution to the Kenyan economy, accounting for 20% of Kenya’s GDP. Of the 462,000 jobs created annually since 2000 in Kenya, 445,000 jobs have emanated from the informal sector, where 85% of women’s businesses are found. (Voices of Women entrepreneurs, Kenya). Female entrepreneurship has received growing attention in recent years, both at the academic and policy level. Their contribution to the economy is noted to be higher than that of men in entrepreneurial activities (Miniti, 2010) .The role of women in creating, running, and growing businesses is recognized as fundamental for growth and poverty reduction. In many countries, women are starting businesses at a faster rate than men. However, women entrepreneurs tend to face disproportionately larger obstacles in accessing credit, training, networks and information in addition to barriers in the legal and policy framework and as a result may not achieve the same level of performance as their male counterparts. According to the World Bank Group's Enterprise Surveys (2007-20120), women own more than 34% of registered businesses in developing countries.