Influence Of Business Associations Services On The Growth Of Micro And Small Enterprises: A Case Of Starehe Sub County, Nairobi County, Kenya

Abstract

According to the Sessional paper No. 2 of 2005 on growth and development of micro and small enterprises in Kenya, only seventeen percent of small and medium firms grow out of micro firms. This is a real cause of concern to policy practitioners and development agencies. Enterprises are therefore advised to continuously improve their services in order to attract more customers and experience growth in sales and income. The purpose of this study was to investigate the influence of business association’s services on growth of micro and small enterprises in Starehe Sub- County. The study was guided by these research objectives, to examine the role of entrepreneurship training in business associations on growth of micro and small enterprises in Starehe Sub- County, to determine how technology transfers services in business associations affect growth of micro and small enterprises in Starehe Sub- County. Other objectives were to explore how networking services in a business association affect growth of micro and small enterprises in Starehe Sub- County and to establish the impact of financial services offered by business associations on growth of micro and small enterprises in Starehe Sub- County. Descriptive survey design was used on the registered business associations by MSEA in Starehe Sub- County selected through purposive and random sampling techniques. Questionnaires were administered to selected members of each of the registered associations. Data was collected and analyzed with the aid of SPSS Version 20 computer program and Microsoft Excel 2007.Descriptive statistics and have been computed to show the relationship between variables. Finally the findings have been presented in the form of tables. The findings have revealed that training services by business associations had positive influence on the growth of micro and small enterprises. The study revealed that technology transfer services offered by business associations have very little influence on the growth of micro and small enterprises. Similarly the study established that networking services in business association had a positive influence on growth of micro and small enterprises. Finally the study found out that financial services offered by business associations have little influence on growth of micro and small enterprise in Starehe Sub-County. It is hoped that the findings will be used to improve business development programs for the micro and small enterprise sector. The study recommends that the government through the Micro and Small Enterprise Authority (MSEA) should partner with business associations to sponsor more training events for the micro and small enterprise sector. It is further recommended that for effective transfer of technology to the micro and small enterprises, MSEA should design more practical oriented training programmes for micro and small enterprises through collaboration with other agencies especially the National Industrial Training Authority. Another recommendation is that large enterprises should be offered tax incentives by the government to encourage them to sign subcontracting agreements with micro and small enterprises. Finally it is recommended that business associations should be encouraged to enter into lending agreements with other financial institutions to increase loans uptake by their members.