| dc.description.abstract | Venture capital, which is quite prevalent in developed countries, has played a big role in
enhancing growth of SMEs by providing equity capital in countries where both forms of venture
capital participate in financing SME. This study therefore, sought to establish factors influencing
access to venture capital on growth of SMES in Kenya. The specific objectives of the study
measured the following variables level of literacy, number of lending institutions, demand for
collateral, business proposal andentrepreneurial experience. Descriptive design was used in this
study because of its appropriateness in establishing relationships between variables and
facilitating the collection of information for determining the population parameter. The study
was conducted in Nairobi County. A sample size of 114 finance managers was used for the
study, where the results of data was analysed and presented in form of tables. Under SME
category within Nairobi County majority of the respondent (SMEs), were in wholesale and retail
trade representing 17%, followed by SMEs in the category of general services at 14%. SMEs
within the hotel industry registered 12% of the study population where as those in the
construction industry registered a close 11%. Manufacturing and agriculture, real estate's and
health registered 9%, 7% and 6% respectively. Financial Services, and Airline both represented
3%, finally education and NGOs registered both 1%. Correlation analysis indicated that there
was very strong positive correlation at (0.7102) between level of Iiteracy and growth of SMEs
while, there was a weak but positive correlation between demand for collateral and growth of
SMEs at (0.1975). In conclusion the study has demonstrated that use of venture capital can be
profitable in Kenya even in an inauspicious political and economic climate. The study
recommended training of owners of SMEs in business management, Venture Capitalism into the
stock markets, setting of management standards for SMEs, and improved financial, ethical and
managerial records for SMEs to improve literacy levels of entrepreneurs. The study recommends
the following policy initiatives by the government that will be useful in managing venture capital
needs for SME at national policy level: - Easy accessibility to credit through specialized or
development oriented banking or financial institutions should be encouraged. This fund should
be made available to the SMEs at reduced interest rate. | en |
