| dc.description.abstract | Micro and Small Enterprises (MSEs) playa crucial role in the development of the
Kenyan economy. The sector is not only a major source of employment, goods and
services, but also plays a significant role in promoting competition, innovation and
enhancing enterprise culture which are necessary for private sector development and
industrialization. However most MSEs in Kenya are not able to generate permanent
and highly remunerative jobs, have high mortality rate and only a few graduate to
medium and large-scale enterprises with high value added products that can compete
with internationally produced goods.
The main objective of this study was to determine, model and estimate the statistical
significance of the institutional factors that influence performance of the Micro and
Small Enterprises using a sample of 150 enterprises in Ngong Division, Kajiado District.
The study employs an econometric analysis using Ordinary Least Square (OLS) linear
regression analysis where profitability is used as a proxy for good performance.
The study found that sex of entrepreneur, location of business, access to information,
age of the business, initial capital, ownership of business and business activities have a
positive and significant effect on profitability. However, job training and experience were
found to be significant but inversely related to profitability. Education level of the
entrepreneur, access to credit, accessibility to advisory services, formality status and
membership to support group though insignificant were found to be positively related to
profitability.
Given the important role the sector plays in the development of the country, the study
recommends provision of a conducive policy environment that enhances the growth
and performance of MSEs. Specifically, this study proposes the following policy
measures to promote the sector and they include: provision of affordable credit, micro
leasing, business management skills, formation of membership support organizations,
encouragement of females to venture into more risky but profitable businesses,
improvement of access to information, promotion of marketing, product design and
development, provision of infrastructure, diversifying research and development and
improving the legal and regulatory framework | en |
