This study examines the socio-economic impact of micro-finance on urban female micro-entrepreneurs in Nairobi, Kenya. Its theoretical framework is empowerment theory in particular and development theories in general. The study examines the impact of micro finance and the opportunities it offers to female micro entrepreneurs in the informal sector, and whether credit has an integrating or segregating effect on women’s socio economic situation. Moreover, the study addresses the ways in which micro-finance and credit have affected social and economic equality between the genders, and whether they have relieved women’s gender specific problems. In addition, this study considers the extent to which the expectations these particular female entrepreneurs have of micro finance are fulfilled. The practical objective of my study is to clarify how micro entrepreneurs have benefited from credit and financial services, how they have used the loans, and how borrowers have repaid the loans. In the analysis, social and economic empowerment are seen to be interrelated; social empowerment is thought to attribute to economic empowerment and vice versa.

Income-earning activities were necessary for women in the empirical data, because being a single mother or the sole breadwinner of the family is common. Therefore, many micro finance institutes emphasise loans given to women. Female micro-entrepreneurs used their loans most often for buying stock. Women considered that this reduced their daily workloads and increased their income.