Effects of Inflation on the Performance of Smes in Kenya

Abstract

This research aims to assess the impact of inflation on the performance of Small and Medium Enterprises (SMEs) in Kenya, focusing specifically on its influence on the export growth of SMEs. The study also seeks to draw policy implications from its findings. The analysis will utilize secondary panel data sourced from the World Bank Enterprise Survey for the years 2007, 2013, and 2018, chosen for its comprehensive coverage of relevant variables. Employing panel data techniques such as Random Effects or Fixed Effects models, with guidance from the Hausman test, will facilitate a robust examination. The study, upon completion of the analysis, intends to provide policy recommendations based on the identified effects of inflation on SMEs' export growth. These recommendations aim to furnish policymakers with valuable insights to inform decisions that promote the resilience and advancement of SMEs in the face of inflationary challenges.