Socio-economic determinants of performance of small and medium enterprises in Gilgil town of Nakuru County, Kenya

Abstract

This study sought to establish the socio-economic determiners of performance of SMEs in Gilgil town of Nakuru County, Kenya. The study was guided by the following objectives: To investigate the extent at which managerial training arid experience influence performance of SMEs; to determine the extent at which education and skills among the proprietors influence performance of SMEs; to find out the extent at which access to financial resources influence performance of SMEs; and to assess the extent at which appropriate technological adoption influence performance of SMEs.

The study adopted a survey research design involving SMEs in Gilgil town. Questionnaires were used as research instruments to gather information on variables of interest. The target population of the study included the 400 SMEs in Gilgil town registered with the County Council of Nakuru in the year 2012 and thereafter a sample size of 196 (49%) SMEs owners was systematically selected as respondents for the study.

Data collected was coded and analyzed with the aid of Statistical Package for Social Sciences (SPSS) computer programme. Quantitative data was analyzed using descriptive statistics such as percentages and frequencies while the qualitative data derived from open-ended questions was analyzed according to themes based on the study objectives and research questions and there after inferences and conclusions were drawn.

The study revealed that very few SMEs owners had obtained management training; most of them had only obtained secondary education; SMEs lacked access to financial resources and very few had integrated technology in their business operation. These shortcomings have adversely affected the performance of the SMEs in Gilgil town going by the low profits that they are making.

The study recommended that the government through the ministry of trade facilitate management training of SMEs owners; government and local authorities encourage prospective SMEs proprietors with higher level of education like diplomas and degrees to venture into SMEs business; lending institutions in Gilgil town to revisit their lending policies so as to make their services and products accessible to SMEs; and government and development agencies facilitate SMEs to acquire appropriate technologies that will aid SMEs in their operations.