| dc.description.abstract | Performance of small and medium enterprises (SMEs) is affected by such factors as weak
infrastructure network, limited capacity to identify, seek and use appropriate technology; and
weak institutional arrangements for providing access to technology and their imperatives.
Urban locations, therefore, may have a positive effect on enterprise performance because of
the more developed infrastructure. Enterprises located in urban areas, therefore, may have
greater access to business, services and enjoy larger local demands than those located
elsewhere, and therefore, perform better purely on this account.
It is argued that in remote areas, including in Kenya, the disadvantages that arise from
isolation can be significantly lessened through access to rapid and inexpensive
communication and mobile telephones have been touted as the "leapfrogging alternatives"
that can close or at least narrow the "digital divide" between rural and urban SMEs, and
consequently between developing world and developing nations.
There are views that assume that the digital divide will increase because of infrastructural
disparities and, therefore, SMEs, especially in rural areas will face even greater disadvantages
relative to their competitors in the urban areas, thus widening the digital divide. However,
mobile telephony is touted to be one of the most rapidly growing information
communication technologies (leTs) in Africa and may even offer greatest benefits to rural
and urban SMEs where the majority of the world's poor reside. - .'
The study seeks to establish the impact of mobile telephon enhancing performance of
SMEs in Rachuonyo District, Nyanza Province compared to those in Nairobi given the
infrastructural problems that are caused by inadequacy of their fixed-line equivalent. In
particular, the study reviews:
• The role mobiles telephones play in the operation of SMEs in urban and rural areas
• The extent that SMEs have accessed the mobile telephony
• The determinants to accessing mobile telephones
• Factors that influence ownership, use and non-use of mobiles
• The impact of ownership and use of mobile telephones on business (turnover, profits,
number of employees, capital investment)
• The prevailing policy framework on the adoption of mobile telephony
To achieve the objectives, the study employs the following methodology:
• Literature review - desk study to gather secondary material that may be relevant to
mobile telephony
• Administration of semi-structured questionnaire to entrepreneurs
• Telephone interviews to gather information from various reT operators
The sample size consists of 100 respondents from Oyugis and Kendu Bay divisions of
Rachuonyo District SME clusters; and the Kariobangi North, Kariobangi South and
Kamukunji clusters of Nairobi area. The cluster sampling method is used to identify the four
SME clusters, followed by random sampling to select 50 respondents from Nairobi (25 from
Kamukunji and 25 from Kariobangi North and South); and 50 respondents from Rachuonyo
District (25 from Oyugis Division and 25 from Kendu Bay Division). Large SME clusters
are found in areas such as the Kariobangi light industries and Kamukunji area in Nairobi and
in Oyugis and Kendu Bay shopping centres in Rachuonyo District. It is for this reason that
the cluster sample method is used. Data is processed and analyzed using Excel and Ms
Word software.
The results suggest that mobile phones have brought considerable benefits to small
businesses in rural and urban areas. People at all income levels are able to access mobile
services by owning a phone, using a relatives or friends or using other channels including
cyber cafes and simu ya jamii booths. Gender, age and education do not seem to constitute
barriers to access. While income certainly explains the low level of usage, for example, it
does not prevent mobile telephone use. Even the absence of electricity does not present an
insurmountable barrier.
There is every reason to believe that economic and social returns to mobile phones will be
highest to rural areas, which are consistently less well provided for with telecommunications
and other infrastructure including roads. Mobile phones substitute for fixed lines in rural
economies, but complement fixed lines in urban economies, implying that they have a
stronger growth impact in rural areas.
The study recommends that the government takes regulatory measures to provide universal
access and rural communications development funds to bridge the true access gap that
cannot be covered on a commercial basis, even if the regulatory framework and conditions
are supportive to operations in rural and low-income areas | en |
