Microfinance for the Urban Bottom of the Pyramid Segment in Nairobi’s Kibera Slum in Kenya: Does Financial Training Impact on Sustainable Urban Development?

Abstract

Although mainstream research on investing in the Bottom of the Pyramid (BOP) segment focus heavily on investors‘ expected returns, there is less focus on the fast increasing gaps on the role of financial training in academic literature. In addition, there is a lack of deliberate focus on the wellbeing and success of targeted micro-entrepreneurs research in the development rena. This is despite the fact that mainstream debates on the topic often focus on the ample literature that illustrates the importance of investing in the BOP segment. Furthermore, urrent literature is enormously concerned with business and financial institutions‘ performance and their impact on development, and it has very little to do with the nexus between financial training and household‘s development, business, and financial institutional performance and urban sustainability. Using non-randomized control trials, this research measures the impact of financial training on selected groups in Kibera slum using a combination of double difference and propensity score matching approaches. In this study, the treatment group received financial training while the control group did not and the two groups were followed for 12 months. The study‘s evaluation results find little or no evidence on sustainability outcomes but a significant and small improvement on business, households and microfinance institutions‘ outcomes.

Keywords: Microfinance institution, financial training, urban sustainability