Nexus Between Finance Accessibility and Financial Health of Blue Economy Micro, Small and Medium Enterprises in Kenya

Abstract

This study explored the nexus between finance accessibility and the financial health of Micro, Small, and Medium Enterprises (MSMEs) operating within Kenya’s Blue Economy. Despite a reported national financial inclusion rate of 84.8%, the financial health of MSMEs remains critically low, with financial health index of 18.3%. Using a descriptive cross-sectional research design, a structured questionnaire was administered to 323 Blue Economy MSMEs in coastal and inland lake region counties of Kenya. Quantitative data was analyzed using SPSS and Structural Equation Modeling. Results revealed a significant negative relationship between finance accessibility and financial health, indicating that increased finance access without appropriate regulation may lead to high transaction costs, limited digital access, low savings, insufficient financial literacy, over-indebtedness and reduced enterprise resilience. This study supports the Public Good Theory, emphasizing the need for regulated finance to function as an enabling, equitable resource for development. It recommends targeted financial products, digital infrastructure development, and MSME-centered financial inclusion strategies to promote sustainability and resilience in the Blue Economy sector.