Contribution Of Development Finance Institutions To The Growth Of Social Enterprises In Nairobi County, Kenya

This study looked at how financial and non-financial support from development finance institutions (DFIs) relates to the perceived growth of social enterprises in Nairobi County, Kenya. DFI support is seen as a way to help enterprises grow. However, there is little direct evidence about which types of support are linked to growth, especially for social enterprises. Kenyan research has examined sector development, social capital, and financing barriers, but few studies have compared lending, capacity building, market access, industrial infrastructure, and policy advocacy in a single local context. The study employed a mixed-methods, cross-sectional design grounded in Market Failure Theory and the Resource-Based View. Eighty-three social enterprise leaders, selected through purposive and snowball sampling, completed questionnaires with both closed- and open-ended questions, representing 92.2% of the target sample. Quantitative data were analyzed using descriptive statistics, correlation analysis, and multiple regression, with HC3 robust standard errors and a bootstrap check. Thematic analysis was used for qualitative data. Study results revealed that capacity building had the highest average score (M = 4.046), followed by lending (M = 3.916) and policy advocacy (M = 3.851). All five types of support were positively linked to perceived growth (r = .308 to .575). When all five were included in the analysis, only lending was a significant predictor (B = 0.512, p = .015), explaining 45.5% of the variation in perceived growth. Capacity building (B = 0.289, p = .062) and policy advocacy (B = 0.288, p = .145) remained positive but not statistically significant, while market access and industrial infrastructure showed no adjusted association. Qualitative data most often mentioned the need for affordable financing, mentoring, buyer connections, and shared facilities. It is recommended that DFIs focus on lending arrangements that are based on verified enterprise cash flows. Capacity-building programs should be expanded only after being evaluated with clear, measurable results. Efforts in market access, infrastructure, and policy advocacy should be designed to meet the specific needs of enterprises.