1. Authors Reuben Kikwatha, Dr Mulwa, Dr Kyalo

2. INTRODUCTION This paper advocates for urgent interventions to promote sustainable development through improved management of microfinance funds by self –help groups. It is based on an empirical study carried out to establish the factors influencing the performance of self-help groups in the management of microfinance funds for sustainable development in Kenya

3. BACKGROUND OF THE STUDY Sustainability and sustainable development  Sustainability - goal of any development efforts  Concept - difficult to pin down as specific meaning and practical applications are highly dynamic.  Largely promoted in environmental sustainability  But sustainability of projects and programs is major concern in todays economy than before.

4.  Yet not enough is known about what makes programs sustainable  Sustainable development is a process of change brought about by implementation of sustainable projects  Ensuring that the exploitation of resources - enhance both current and future potential to meet human needs and aspirations

5.  Different strategies and approaches employed towards sustainable development  Particularly participatory approach which enhances community empowerment through SHGs

6. Self Help approach to sustainable development  Doctrine of sustainability stresses participatory approaches  The poor should become self-reliant, mobilizing their own energies and resources to solve their own problems  Empowering communities to implement sustainable projects and programs  Through self-help groups – though not the panacea if not well managed  Financial empowerment of communities – through advancing loans by micro-finance institutions

7. Microfinance as an approach to sustainable development  Microfinance - “banking the un-bankable,  Despite the increase in the number of microfinance institutions - only few can show tangible benefits and real impact in alleviating poverty and promoting sustainability.  Sometimes has been the cause of self help group disintegration

8.  Characterized by - Poor repayment, delayed or event default  Most of studies focused on performance of microfinance institutions – not much on the drivers of their success (performance of self-help groups)  Firm and Successful groups – success in microfinance approach in enhancing sustainable development  Paper focuses on - Factors specific to self help groups performance  Assumed that strong groups – ability to manage finances  Delimited within Kikuyu sub-county

9. OBJECTIVES OF THE STUDY 1. To investigate the extent to which group leadership influences the performance of self-help groups in managing microfinance funds for sustainable development in Kikuyu sub-county, Kenya. 2. To establish the extent to which clarity of group goals and objectives influence the performance of self-help groups in managing microfinance funds for sustainable development in Kikuyu sub-county, Kenya.

10. LITERATURE REVIEW From empirical literature - evident that sustainable development gains its boost especially in developing world due to the contribution of institutions such as microfinance, business organization and non-governmental organizations. Bakhtiari (2006) says that microfinance has gained a universal consensus as an effective tool for alleviating poverty and wellbeing improvement. Sameer, et.al (2014) agrees with this sentiment that the role of microfinance institutions in poverty reduction and wellbeing improvement has attracted the Policymakers’ attention in the developing countries across the globe.

11. Sameer, et.al (2014) - by providing microfinance services, poor will be able to participate in the economic market through forming their small businesses. Akudugu (2014) One of the greatest tools used to fight poverty in this century is credit delivered to self-help groups (SHGs) Ananda (2011) agrees that the group lending is the preferred model of micro credit collateral.

12.  Akudugu (2010), SHGs create opportunities for the poor who cannot individually secure financial services  Ramesh (1997), while studying SHGs concludes that members share common perception on needs and belong to almost same economic and social status.  Lesley (2000) shared vision, missions’ goals and objectives provides the foundation the group needs into the future.  Curran et.al (2009) says that leadership impact on improving project management practices in order to reduce uncertainty and complexity associated with project pursuit.  Mulwa (2005) advises that that transparency and accountability leadership is what it takes to ensure authentic participation of all stakeholders

13. RESEARCH METHODOLOGY  The research design employed was descriptive survey  Stratified random sampling was used to generate the required sample size.  A list of all groups (strata’s) in each of the microfinance (DOREP, KWFT and Jamii Bora) -generated from which a random sample from each (Microfinance) stratum was taken  A sample size proportional to the stratum's size when compared to the population was selected  Sample size comprised of 78 respondents drawn from 780 groups.

14.  Both primary and secondary data was collected for the purposes of this study.  Desktop study gave the secondary data sourced from written materials including books and journals articles.  Use of pre-designed questionnaires to capture information

15. RESEARCH FINDINGS Elective leadership: 48% of the groups studies did not have leaders elected in a democratic way while 38% were elected democratically. It was also found that elected leaders where never changed except in a few groups only after the members demanded Such a practice could have impacted on the leadership dynamics in the group in terms of performance in management of group projects.

16.  Frequency of meetings: that 29 (37%) of the respondents held meetings when necessary, 14 (18%) conducted once a week, while 32 (41%) met once a month.  Meeting once a month was a good practice however 37% is a significant percentage that did not have a structured system of meeting exposing the group to risk of poor management, fund misuse and failure to achieve its goals.

17. Majority 64 (82.1%) of the respondents said that the group officials make the most important decision, 4(5.1%) by the chairperson while 10 (12.8%) of the respondents indicated decisions are made by group consensus. This implies that the members were not fully involved in decision making concerning the group exposing the group further to poor management of funds.

18. Majority 57 (73.1%) of the group members indicated that the ways finances were being managed should be improved, 9 (11.5%) said that decision making process needed to be improved while 8 (10.3%) indicated that the way meetings were conducted should be improved. This finding shows that the respondents were not satisfied with these aspects thus a reason for poor performance of the groups

19. Setting group goals and objectives Decision makerFrequencyPercent Members 67.7 All the officials 1417.9 Microfinance officer 22.6 Chairperson 3848.7 N/A 1823.1 Total 78100.0

20. Most of the goals and objectives were highly influenced by the Leaders as indicated by 38 (48.7%) while 14 (17.9%) indicated that the decisions were made by all the members. These findings confirm the previous findings that the groups were not democratic hence this affected the performance in management of micro economic projects by the groups.

21. Review of group goals ResponseFrequencyPercent Every three months 45.1 Every six months 1519.2 Every year 1012.8 Never 4962.8 Total 78100.0

22. 62% of groups interviewed still had never reviewed their goals and objectives. The report given by the respondents showed that the goals and objectives of groups were not reviewed periodically which could affect the performance of these groups

23. Reasons for not achieving group objectives ResponseFrequencyPercent Poor leadership 1620.5 Lack of knowledge 2532.1 lack of funding 45.1 Lack of common focus 2734.7 N/A 67.7 Total 78100.0

24. Among the Reasons for lack of achievement of goals and objectives were;  lack of common focus  inadequate knowledge  poor leadership in order of significance as rated by the group members

25. CONCLUSIONS AND RECOMMENDATIONS  Majority of groups were not strong enough to successfully manage microfinance funds  For groups to successfully manage microfinance funds – two factors must be addressed – group leadership clarity of goals  This can be achieved where there is democracy in election and change of leaders  Important decisions need to be done by consensus and not mainly by officials  Specific training very important – finance management and group dynamics and leadership skills

26.  Group focus, goals and objectives well understood by the leaders – need to have this shared among the group members- The groups that had goals did not review them periodically and relied on outsiders to guide them on what to do (microfinance officers)  Most of groups - the goals and objectives not achieved due to lack of common focus, inadequate knowledge and poor leadership.

27.  Advancing of loans to self-help group is not a solution as most of the group perform poorly  Concerned parties (microfinance institutions, government and NGOs) should assist the groups have proper leadership structures which will facilitate management of small projects funded through micro finance funds  Groups needs to be nurtured and mentored – both governance and operations to ensure successful implementation of projects/ventures funded through microfinance