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

John Karugu Ndungu, Charles Katua Kithandi and Molson Onchomba
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John Karugu Ndungu: School of Business and Economics, Daystar University, Kenya
Charles Katua Kithandi: Daystar University
Molson Onchomba: Daystar University, Kenya

East African Finance Journal, 2025, vol. 4, issue 4

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.

Keywords: Operational Efficiency; Resource Utilization; Cost Minimization; Credit Access; Government Regulation (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:cwk:eafjke:2025-32

DOI: 10.59413/eafj/v4.i4.3

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