Interest rates capping is one form of government financial controls. Financing has been identified as a key element for micro and small enterprises to thrive in developing countries. Researchers have argued that lack of financing is almost universally indicated as a key problem for micro and small enterprises. The study was guided by the following objectivesto investigate the effects of interest rates caps on the relationship between financial access and performance of micro and small enterprises in Kericho County, Kenya The study adopted a cross sectional survey design from a population of 7277 micro and small enterprises. Stratified and simple random sampling was used to sample the 380 micro and small enterprises. Questionnaires were used in the data collection. Data was analyzed using both descriptive and inferential statistics with the aid of SPSS version 25. The research findings indicated that interest rates capping significantly moderates the influence of financial access and entrepreneurial performance among micro and small enterprises in Kericho, Kenya.It was concluded that interest rates capping significantly moderates the influence of financial access, financial transparency, financial credit products, financial literacy and entrepreneurial performance among micro and small enterprises to credit in Kericho, Kenya.It was recommended that financial institutions put in place measures to protect micro and small enterprisesfrom any uncertainties following the capping. Further, financial institutions should ensure that they development innovative financing products which micro and small enterprises can access after the interest rates capping in a bid to enhance entrepreneurial performance.It was recommended that financial institutions should ensure that credit facilities are tailored to the need of micro and small enterprises.
Keywords: Interest rates capping, Financial access, Entrepreneurial performance, Micro and Small enterprises