Influence Of Zuku Fibre Optic Project On The Performance Of Small Businesses In Nairobi County,

Abstract

The small business sector is very important due to its contribution to the economy. Just like in other underdeveloped nations, the small business sector is considered Kenya’s growth engine due to its contribution in the prosperity of the nation. The construction of ICT infrastructure in Kenya, opened the country to digital interaction, socially, politically and businesswise. In 2008, 77% of the small businesses in Kenya owned a business, but only used them for basic application such as communication and automation. The main aim of this study was to investigate the impact of the Zuku fibre optic project on the performance of small firms in Kenya’s capital, Nairobi County. To attain this purpose, the following objectives were formulated: To establish how communication efficiency through Zuku fibre optic project influences performance of small businesses in Nairobi County; To assess how internet access through Zuku fibre optic project influences performance of small businesses in Nairobi County; To establish the extent to which communication costs through Zuku fibre optic project influence performance of small businesses in Nairobi County and to determine how access to e-commerce through Zuku fibre optic project influences performance of small businesses in Nairobi County. This was achieved by using a descriptive survey design. The study’s target population is made up of 1,576 small businesses within Nairobi City, which are connected to Zuku Internet services. A stratified random sample of 310 small businesses was selected. Data was then be collected using questionnaires through face to face interview. Data was entered into Microsoft Excel 2013 and quantitative data analysed using descriptive statistics, which are indices describing a given sample. The descriptive statistics used include: mean, standard deviation, frequencies and percentages. In the research, 230 questionnaires were used to collect data. Out of all the respondents, 59.5% were male while 47.4% were female aged between 26-35 years. 30.3% of the businesses being in the ICT sector and 60.7% of the businesses being 2-5 years old. 72.22% of the respondents were proficient when it comes to computer literacy. 95.65% of the respondents used online communication at least on a weekly basis, with 84.35% of them using online communication on a daily basis. 66.09% of the respondents had access to the internet used it on a daily basis for business related research. Communication costs for businesses before and after connection to Zuku went up in businesses that spent below KES 5,000 and went down for businesses that spent above KES 10,000. 69.57% of the businesses had a website mainly used it to communicate to customers and potential customers. Profits, dividends to shareholders and value of assets increased after connection to Zuku. Variables on communication efficiency, internet access and communication costs had a positive Pearson Correlation Coefficient with increase in profit. Access to Internet has a high correlation to the performance of a business. Factors such as the age of the business also affect the performance and profitability of small business. Improved communication efficiency, access to internet and access to ecommerce leads to improved ease of doing business, thus improving business performance. Communication costs tend to increase for businesses that spent less than 5,000 per month to take advantage of the internet, while those that spend above 5,000 record lower communication costs introduced by the internet, to improve business performance. In conclusion, small businesses should not just be encouraged to adopt the internet, but should also be trained to make the best use of it so as to save on cost, time and improve their performance.