| dc.description.abstract | This study was conducted with the objective of finding out the entrepreneurs' perceived
relevance of business development services received by the small and micro-enterprises
(SMEs) operating in Nairobi city.
The focus of the study was on all small and micro-enterprises, which operate in Nairobi.
The study however, zeroed in on those SMEs operating in the areas of Kibera,
Kariobangi, Kangemi, Kawangware, Gikomba and Kamukunji.
The problems faced by these SMEs in their operations were the main areas of concern.
The study set out to determine if the various non-financial business development services
received by these SMEs were tailored to their need for these support services or they
received them only because they either they were available or they had some indirect
benefits attached to them.
The study had two main objectives: -
1) Determining the extent to which non-financial business development services
available reached the SMEs operating in the city of Nairobi.
2) Determining the perception of the SMEs owner-manager on the relevance of the nonfinancial
business development services offered to them.
The study hypotheses were set as: -
Ho: The non-financial business development services currently being offered to the SMEs
in Nairobi are t~~se that an~perceived to be )fnportant to their development.
HI: The non-financial business development services currently being offered to the SMEs
in Nairobi are perceived to be unimportant to their development.
Earlier studies show thatthe SMEs in the City of Nairobi are not crowded in one region
but rather clustered in certain parts of the city. The study therefore used a clustered
random sampling method :to choose the SMEs to interview. In each of the regions a
simple random sampling method was used to choose the respondents to interview. The
researcher approached the welfare associations for the SMEs in these regions and
requested for a list of their members. The researcher then selected the names of the
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enterprises to be interviewed randomly from the lists provided. The researcher choose to
interview only permanent SMEs because business development projects target such
SMEs. These types of SMEs are easier to trace, more accessible, reliable and easier to
m07 sample of 80 SMEs was finally interviewed.
Primary data was collected through personally administered structured questionnaire. The
study targeted the owners of these SMEs or the managers or owners' spouses concerned
with daily operations of the enterprise.
The data obtained in the study was then coded and feed into the computer. An SPSS
computer package was used to analyze the coded data. Through this package, the data
was tabulated in the form of frequencies and percentages. These descriptive statistics
were used to answer the first objective above.
The second objective was analyzed through a cross tabulation of the business
development services required and received by the recipients (SMEs) of these business
development services. Chi-square tests of independence values for each of these cross
tabulations was obtained from the computer out-put. These ~hi-square values were then
compared to the critical values obtained from the table at 95% degree of confidence.
Where the chi-square values exceeded the table critical values, the study concluded that
the business development service offered was not relevant to the recipients (SMEs)
.
needs. t - .;
The respondents interviewed. said their businesses were either experiencing moderate or
poor business performance due to the various existing business problems. The main
problems faced by these SMEs included low demand for their products or services, poor
marketing strategies, use of outdated tools and equipment or lack of these tools and
equipment all together, lack of skilled personnel, and poor bookkeeping. Most of these
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entrepreneurs also complained that they lacked both information and access to
government contracts among other lucrative business contracts. Majority of these
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entrepreneurs ranked these problems as very serious in hindering their enterprises' growth
and development.
The study results showed that business development services requirements far exceed the
supply for these services. Most of the SMEs are lacking the relevant business
development services they require. Those SMEs owner-managers who received business
development services felt they were receiving support services that were not relevant to
their needs. When the study explored the type of non-financial services these
entrepreneurs considered crucial in their quest for business progress, marketing, business
linkages, technical assistance and training on bookkeeping and loan management were
the ones ranked as very important by about 20% of the respondents. Over 35% of the
respondents however ranked these same support services as important
The study showed that the need for relevant business development services as perceived
by the SMEs owner-managers in Nairobi is very high. Most (over 60%) of the
entrepreneurs are looking for business development services that best suit their needs.
Since these SMEs have individual unique business development service needs but the
concerned organizations only provide general business development services, they fail to
meet the support service requirements of these enterprises. The provision of
developments services in the city of Nairobi can be said to be supply-driven rather than
demand-driven. This conclusion is supported by the fact that only two of the eight
business development seiYice~ studie~ were found t .be relevant to the recipients needs.
. ..
Further, all the support services studied are experiencing excess demand, Some providers
of these services only offer. them to their client (SMEs) because they have either the
necessary skills or r-esources required and not because they have carried out a need
assessment and discovered the demand potential in the service they are offering. The
achievement of proper SME development will best take place if the business
development services are demand driven. To achieve this objective, the providers of these support services should carry out research into the real business development service
needs of their potential client SMEs and aim to satisfy these requirements effectively and
efficient!y. | en |
