Asia Pacific Journal of Multidisciplinary Research, Vol. 5, No. 2, May 2017 _________________________________________________________________________________________________________________________ 87 P-ISSN 2350-7756 | E-ISSN 2350-8442 | www.apjmr.com Microfinance Institutions’ Social Intermediation and Micro and Small Enterprises Survival in Thika Town, Kenya ZabronChege Wairimu 1 , Shadrack Mwenda Mwilaria 2 1 Department of Economic Theory, Kenyatta University, Kenya 2 Lecturer, Department of Economic Theory, Kenyatta University, Kenya zabronc09@gmail.com 1 , Mwilaria.shadrack@ku.ac.ke 2 Date Received: February 7, 2017; Date Revised: April 11, 2017 Asia Pacific Journal of Multidisciplinary Research Vol. 5 No.2, 87-93 May 2017 P-ISSN 2350-7756 E-ISSN 2350-8442 www.apjmr.com Abstract –The continuous rapid growth of microfinance institutions in Kenya seems not to offer enough solution to the micro and small enterprises survival challenges with more than a one-third of MSEs start-ups collapsing within the first three years. It is the high rate of collapse and low rate of survival of MSEs that motivated this research to fill the existing gap on the missing linkage between MFIs and MSEs survival. This study looked at the role of the social intermediation services offered by MFIs on survival of MSEs in Thika Town which is both an industrial town and a business hub. A descriptive study design was adopted. Stratified and purposive sampling methods were used to select a sample 272 MSEs. Findings indicated that; regular microfinance participation help reduce loan application and payment bureaucracy while keeping entrepreneur updated on available opportunities. Training equips MSEs owners with necessary managerial skills on financial management, book keeping, and business operations. Group liability eliminates the need for collateral security when accessing loan while it increases the amount of loan accessed. Networking increases business link widening goods and services markets and allows for formation of business clubs. Finally, it was found that training was the most sought service followed by group liability, microfinance participation, and networking. From the study findings, the researcher recommends that MSEs continue seeking for social intermediation services and especially networking to improve their competitiveness and create a competitive advantage over their competitors boosting their survival. Keywords –Social Intermediations, Micro and Small Enterprises (MSEs), Microfinance institutions (MFIs), Survival INTRODUCTION Microfinance Institutions Microfinance is the provision of financial services such as savings and credit to low-income clients including self-employed individuals [1, [2]. However, microfinance institutions (MFIs) services have evolved to include non-financial services such as micro-insurance, payment services, social intermediations groups, training in financial literacy and business management. Therefore, microfinance definition has broadened to include both financial and nonfinancial services with a client base typically ranging from self-employed to low-income entrepreneurs (i.e. traders, street vendors, small-scale farmers, artisans) in both urban and rural areas [1]. The microfinance institutions have traditionally targeted micro, small and medium enterprises (MSMEs) which have difficulties in accessing financial services from formal commercial banks. In Kenya, the microfinance movement gained momentum in the late 1980s due to the exclusion of a significant proportion of the population by the commercial banks and yet the need for credit by low- income individuals was rising. MFIs emerged to fill the market gap left by banks by providing credit to individuals, micro, small and medium enterprises (MSMEs) which were on the rise during the period. The 1990s period saw structural adjustments policy of deregulation and liberalization of the economy. As a result, the state proposed investment incentives like investment allowance for enterprises outside Nairobi and Mombasa and tax exemption on imported machines worth less than 20 million for rural areas small enterprise to encourage entrepreneurs to engage in informal sector business [3]. The result was an