Determinants of growth of manufacturing SMEs in Kenya: A case study of industrial area in Nairobi

Abstract

This research aims to give an overview of determinants SMES growth in Kenya. The analysis covers a period of five years from 2006 to 2011. A range of approaches and results are discussed within a unified framework; regression analysis was used to analyses the factors. To comparatively examine the individual impact of ten “key factors” influencing business failure within the small and medium-sized enterprises (SMEs) in Kenya; A survey instrument testing ten key variables was developed and data was generated by conducting a census in industrial area. Forty nine questionnaires were administered to manufacturing SMEs in industrial area to fill. The results showed that interest rates, dollar rate, fuel Cost, business skills and political instability were the major factors found to influence SMEs growth into large business enterprises. This study adopted a census of a small area due to the short time frame for conducting the study. The results of this study reveal that finance cost, manufacturing cost factors and political stability are responsible for SMEs failures in the Kenya hence more effort needs to be focused in these areas. This study attempted to fill the gap in comparative studies on factors influencing manufacturing SMEs failure in Kenya