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Cost Leadership Strategies and Credit Access Among Micro, Small, and Medium Enterprises in Nairobi City County, Kenya

Author

Listed:
  • John Karugu Ndungu

    (School of Business and Economics, Daystar University, Kenya)

  • Charles Katua Kithandi

    (Daystar University)

  • Molson Onchomba

    (Daystar University, Kenya)

Abstract

Access to credit remains a critical challenge for micro, small, and medium enterprises in Kenya. This study examined the effect of cost leadership strategies on credit access among MSMEs within Nairobi City County, and assessed the moderating role of government regulation. It focused on operational efficiency, cost minimization, and resource utilization practices. Guided by Porter’s Generic Strategies Model, Resource-Based View Theory, and Transaction Cost Economics, the study used a descriptive and correlation design and surveyed MSME owners. Results showed positive and significant associations between cost leadership dimensions and credit access, while government regulation was negatively associated and exhibited a negative moderating effect. The study concludes that strengthening cost leadership improves credit access, but stringent regulation can increase compliance burdens. It recommends efficiency improvements by MSMEs and streamlined policy frameworks to reduce barriers.

Suggested Citation

  • John Karugu Ndungu & Charles Katua Kithandi & Molson Onchomba, 2025. "Cost Leadership Strategies and Credit Access Among Micro, Small, and Medium Enterprises in Nairobi City County, Kenya," East African Finance Journal, East African Finance Journal, vol. 4(4).
    • Handle: RePEc:cwk:eafjke:2025-32
    DOI: 10.59413/eafj/v4.i4.3
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    References listed on IDEAS

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    1. Beck, Thorsten & Demirguc-Kunt, Asli, 2006. "Small and medium-size enterprises: Access to finance as a growth constraint," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 2931-2943, November.
    2. Dahunsi Olusola Joseph & Soetan, Olufunmilayo Rosemary, 2022. "Resource-Use Efficiency and Firm Performance in Nigeria’s Manufacturing Industry," Economy, Asian Online Journal Publishing Group, vol. 9(1), pages 1-8.
    3. Kingstone Mutsonziwa & Ashenafi Beyene Fanta, 2021. "Small Business Performance: Is It Access to Formal or Informal Credit that Matters?," Journal of African Business, Taylor & Francis Journals, vol. 22(4), pages 550-563, October.
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    Cited by:

    1. Mwangangi, Christine Wavinya, 2026. "Credit Access in Self-Help Groups and Community-Based Organizations in Makueni County, Kenya: Challenges and Opportunities," East African Finance Journal, East African Finance Journal, vol. 5(2).
    2. Ndwiga, Steve Mbogo, 2026. "Digital Lending and Financial Performance of Small Retail Businesses in Nairobi Central Business District, Kenya," African Journal of Commercial Studies, African Journal of Commercial Studies, vol. 7(3).

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