Factors Influencing Growth And Development Of Small And Medium Enterprises In Kenya, A Case Of Huruma Division, Nairobi County
Small and Micro Enterprises (SMEs) play an important economic role in many countries. In Kenya, for example the SME sector contributed over 50% of new jobs created in 2005 but despite their significance, SMEs are faced with the threat of failure with past statistics indicating that three out five fail within the first few months. The objective of this research was to assess the influence of Education and training, peer influence, Entrepreneur‟s innovativeness, Registration process and licences and physical infrastructure on growth and development of SMEs in Kenya. In order to realize this purpose, this study adopted descriptive survey employing the use of questionnaires and interviews to collect data from a sample size of 120 entrepreneurs in Huruma who was selected using stratified random sampling. Data was analysed using descriptive statistics such as percentages, frequencies, figures and tables. Using statistical package for social sciences (SPSS) data was analyzed based on descriptive statistics and Pearson‟s Product Moment Correlation Co-efficient was used to establish relationships between independent and dependent variable. The study revealed that there is a positive relationship between Growth and Development of SMEs and education and training skills, Business registration Process, Innovativeness and Physical Infrastructure of magnitude 0.216, 0.236, 0.064 and 0.202 respectively. The positive relationship indicates that there is a correlation between the factors and the Growth and Development of SMEs in Huruma. This infers that Business registration Process has the highest effect on the Growth and Development of SMEs in Huruma, followed by Education and training, then Physical Infrastructure, Innovativeness while peer influence has negative weak correlation with the growth and development of SMEs in Huruma. The study found out that education and training affected SME growth and development and that majority of the respondents had not attended any form of training on business management it therefore recommends that training policies should be introduced to the SMEs owners. As county governments look at SMEs as a way of providing employment to the many unemployed youths, they should consider investing in these people by providing education and training. Since Entrepreneur‟s individuals‟ innovativeness affects SME growth and development of the business, it is recommended that stakeholders should provide funds to enable innovativeness and adoption on the current technologies. The Government on the other hand should come up with easy procedures in registration process and licensing of the SMEs.