Factors that Determine the Capital Structure among Micro-Enterprises: A Case Study of Micro-Enterprises in Kisii Town, Kenya
Nyanamba, Steve Ondieki; Nyangweso, Gaster Nashappi; Dr. Omari, Stella Moraa

Abstract
The purpose of this research was to determine the factors which influence the capital structure among microenterprises. The objectives of the study were to identify the factors affecting capital structure of micro-enterprises, to establish the extent to which the factors affect capital structure of micro-enterprises and to analyze the extent to which micro-enterprises have used external finances. The results identified the major determinants of the capital structure of micro-enterprises as being access to capital markets, size of the business, profitability of the business and lender’s attitude towards the firm. Banks and financial institutions were noted as the most preferred form of external financing for the micro-enterprises. The study concluded that there are a number of factors affecting the capital structure of micro-enterprises and that micro-enterprises prefer borrowing from various external sources and this affects the capital structure of the micro-enterprises.

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