Determinants of growth of small and medium enterprises in Kakamega Central Sub-county, Kenya
Abstract
Challenges to the growth and viability of Small and Medium Enterprises (SMEs) are arising
from globalization, increased customer expectations, technological advances, and increased
competition. Business improvement models and process and management techniques have
largely originated in large, private-sector organizations and are not necessarily applicable to
SMEs. It is not considered appropriate for researchers to postulate that the planning and
change processes of large organizations can be applied to SMEs in a less formal manner or
on a smaller scale. The purpose of this study was to examine the determinants of growth of
Small and Medium Enterprises in Kakamega Central Sub-County, Kenya.The following
study objectives guided the study: to examine how financial factors influence the growth of
Small and Medium Enterprises; to establish how law and regulations influence the growth of
Small and Medium Enterprises; to determine how business location influence the growth of
Small and Medium Enterprises and to establish the influence of technological advancement
on growth of Small and Medium Enterprises in Kakamega Central Sub-County. Conceptual
framework guided the study by illustrating how the various variables were interrelated.The
study adopted a descriptive survey design. The target population consisted of total of 1,500
registered SMEs under Single Business Permit Registration. Simple random sampling
techniques were used to select 103 SMEs entrepreneurs while purposive sampling technique
will be used to select registrar of single business permit. Data was collected by use of
questionnaires and interview schedules. On validity of the instruments, the researcher used
content validity while through pilot testing process was used to 'test reliability comparing
with a Cronbach's Alpha Coefficient which yielded an alpha of 0.S2.The study findings
indicated that there was a marginal weak association between financial factors and growth of
SMEs.Correlational results between law and regulations on growth of SMEs do indicate that
income taxes and collection of revenues from the government agents hamper the running of
the business, thus, slowing the growth of the SMEs. Business accessibility to customers and
business location significantly affect the growth of SMEs in Kakamega Central Sub-
County. The usage and integration of internet and intranet, mobile phones and advance in
technology had significant (p<0.05) influence on the growth of SMEs. The following
recommendations were made: the government should ensure that the interest rates suggested
by the Central Bank of Kenya are adopted by both commercial banks and micro financial
institutions so as to encourage the business owners to access micro credit facilities. There is
need to improve infrastructure, costs and IT training and in information relating to the
business opportunities that like e-commerce and creation of e-knowledge among business
owners.On the business location, the counties should subsidies the land rates and rents within
the Central Business District-to encourage more SMEs. accessibility to customers. The
researcher then analysed the data and present the results in form of frequency tables. The
findings of this study may be useful to the Ministries Trade, academicians and researchers in
their improvement of policies and practices on SMEs.
Citation
James Wambua Nganda (2013). Determinants Of Growth Of Small And Medium Enterprises in Kakamega Central Sub-county, Kenya. Master of Arts in Project Planning and ManagementPublisher
University of Nairobi
Collections
- Faculty of Education (FEd) [5964]