The development of a cost-effective extension service for small business; a Kenya experiment
Abstract
The·objective of the work is to examine the hypothesis
that individual extension services are ne cessary for proraot.ing
the development of small business in general, ·and small scale
retailers in particular, and that such services call economically
and effectively be provided by staff with only four years of
secondary education, no business experience and a mi.nimum of
formal training.
Small scale retailers have traditionally been disregarded
or even despised. It is suggested that they can nevertheless
playa vital role, in Kenya and elsewhere, by satisfying the
needs of their customers, making available a wLde variety of
inputs which are necessary for development, mobilising o the rwi se
idle capital and other resources, and by providing employment
opportunities and a source of entrepreneurial talent.
The actual performance of Kenya's small scale retailers is
examined from the point of view of their customers, the
manufacturers of the goods they distribute and their owners.
Their failings are identified and related to their historical
development and their present attitudes to business activities.
The presently available sources of assistance for small
business are described and evaluated. It is evident that the
shortage of capital is believed by most small businessmen, in
all parts of the world, and by many of those who attempt to
help them, to be their major constraint. This belief is examined
in some detail. Loan programmes and associated assistance in
Kenya and other countries are assessed, and the actual employment
of capital~y small scale retailers in Kenya is analysed on the
basis of sets of accounts for a large sample of shops. It is
suggested that the capital constraint is not as critical as it
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has been believed to be. What is lacking is the effective
emp'loyment of the existing resources.
Courses and other forms of training for ~ctailers ADd other
small businessmen in various countries are 01J tlined. Hany
authorities conclude that the most effective forw of training
is an extension service, p:coviding Lnd.i.v i.duaI advice on the
!I businessman's own premises. Such services have however rarely
been implemented, because of the difficulty and cost of
recruiting staff of the qualifications and experience believed
to be necessary. The theory and practice of extension and the
effective diffusion of innovations in agriculture and other
fields is then examined; it becomes clear that apart from the
particular difficulties of staff recruitment, there are other
advantages to be gained from the use of relatively low-level
staff .
There foLl.ows a des cri.pt i.on of an experiment to test
whether a staff training and field consultancy procedure could
be devised which would enable staff with four years of secondary
education, and no business experience, to provide an effective
extension service for small scale retailers. The methcdology is
explained, and an account is given of how the procedure was
developed, pretested by University students, and finally tested
by replicable application in the field using consultants with
only four years of secondary education. A smaller scale
experiment using the part time services of private sector sales
representatives was also carried out, to test their ability to
apply the same procedure in the course of their promotional
activities.
The results of the experiments are described, and an
attempt is made to analyse the costs and benefits of a Kenya
wide replication of the procedures and techniques which have
been devised __ The problem of determining an appropriate
institutional location for the service is also discussed.