Effects of Community Currency Systems on Economic Growth Dynamics of Small-Scale Tradersin Kibuye Market, an Informal Urban Settlement

Most small-scale businesses have unstable and weak economic stabilities that negatively impact their livelihoods. The general study objective was to explore the effects of community currency on small-scale businesses in informal urban settlements in Kisumu City, Kenya. The research sought to determine the effect of Community networks on the growth of small-scale businesses in informal settlements, evaluate the effect of financial Services Innovations on the growth of small-scale businesses in informal settlements, and determine the effect of social innovations on the growth of the small-scale businesses in the informal settlements within Kisumu city. The study adopted the consumer choice theory, social capital theory and the SCALERS Model. Moreover, the participatory action research (PAR) design was also employed. A population of 5,000 traders in the Kibuye market were targeted, giving a sample size of 678 smallscale traders. Quantitative data were analyzed using descriptive statistics and inferential analysis, while qualitative data were analyzed thematically. The results showed that Community networks positively impactedthe growth of smallscale businesses with r = 0.784. Financial Services Innovations registered a positive effect at r = 0.806. At the same time, the social innovations exhibited a positive effect with r = 0.760. The entrepreneurial networks as a moderating variable had a small positive effect at r = 0.268 on the growth of the small-scale businesses in the informal settlements of Kisumu County. CC is a significant factor in enhancing financial innovation and could be a key catalyst to propel small-scale trading activities within the informal urban settlements in Kenya. The study outcomes will help strengthen the community's social and financial growth, helping reorganize governance structures and participatory capacities of communities and local governments to boost their adoption of community currency systems.