Agency Theory essay

Topics: World population, Population, Poverty Pages: 1 (370 words) Published: April 24, 2013
Agency theory
Kenya has 62 micro-finance NGO’s. They have demonstrated that micro-business lending in Kenya is feasible, and that small borrowers do pay. They have pioneered new product types and innovations and some are moving toward sustainability. The microfinance NGO’s have played an important part in moving government toward recognition of the small borrower and have been instrumental in advancing the cause of the proposed Micro-Finance Bill. Small borrowers and the informal sector form a majority of the population. Thus focus on provision of financial services to small borrowers and the informal sector is likely to impact on their socioeconomic status (Central Bank of Kenya 2003).

Approximately 80% of Kenya’s population of 40 million people is rural dwellers who depend wholly on agriculture and fisheries for survival. According to the Ministry of Agriculture’s Strategy for Revitalizing Agriculture (SRA) for the Years 2004 – 2014, 87% of the poor households not only live in the rural areas and depend on agriculture, but over 50% of those households are food insecure. The agriculture in Kenya contributes 26% of the Gross Domestic Product (GDP); similarly, this sector contributes a further 27% through linkages with the manufacturing, distribution and service-related sectors. This contrasts sharply with the fact that there is significant potential for increased agricultural production, which has not been fully exploited. Agricultural production and performance in Kenya has been experiencing a steady decline since over the last two decades. During the 1960s and 1970s growth in agricultural production stood at an average of 6%. This growth declined to 3.5% a decade later and during the last decade, it plummeted further to 1.3%. While this agricultural growth rate declined sharply on the one hand, the corresponding population growth rate stood at a national average of 2.9% within the same decade. Traditionally, when a person wants to start a business venture,...
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