Small Scale Industries in Rural Areas:a Study of Informal Metal Work Enterprises in Bunyore, Vihiga District

Abstract

This work is about the informal metal work sector, popularly known as the Jua kali sector, in rural areas. The study sought to establish the social characteristics of entrepreneurs in this sector and analyze their involvement in the sector in relation to their levels of education. The study also sought to find out whether socio-economic status of an entrepreneur and the economic environment influence the development of industries in this sector. The study hypothesized that; (1) there is a relationship between an entrepreneur's involvement in the informal metal work sector and his level of education, (2) development of informal metal work enterprises is influenced by entrepreneurs' socio-economic status and (3) there is a relationship between the economic environment and the development of informal metal work enterprises. A survey research was conducted in Bunyore area of Vihiga district. A sample size of

120 respondents was drawn using multi-stage cluster sampling procedure and information was obtained from the respondents by the use of interview schedules. Data presentation and analysis was done by the use of frequencies, percentages, cross tabulations and multiple regression analysis. About the entrepreneurs' social characteristics, the study found that majority of the entrepreneurs are middle aged (between 26 and 40 years), they are mostly males, have a high number of dependants (4 on average), have low levels of education, their businesses are young, their start up capital is mostly from relatives or personal savings, they lack security of tenure, their income is relatively low and they have strong social ties with other businesses and members of the community. In looking at an entrepreneur's involvement in this sector in relation to his level of education, the study found that 77% of the entrepreneurs were fully involved in this sector. On the other hand, the study found that 82% of entrepreneurs had low levels of education (below form 2). From the hypothesis and its testing, it was found that there is a relationship between an entrepreneur's involvement in this sector and his level of education. The study also sought to find out whether development of industries in this sector is influenced by socio-economic status of entrepreneurs and the economic environment.

Most entrepreneurs were found to be from low socio-economic status. This was due to their having a high number of dependants, low levels of education and do not have alternative sources of income to supplement income from the business. The testing of the hypothesis revealed that socio-economic status of entrepreneurs influences the development of informal metal work enterprises. On the other hand Bunyore was found to have a very conducive economic environment. Apart from stiff competition, there is a good road network and a good network of electricity (50% of respondents used electricity). Most of the raw materials are also available from within Bunyore. However, incomes earned are still low. Findings in the study revealed that the economic environment does not influence development of industries in this sector. In view of the findings the study gave the following recommendations: 1. Training amongst informal metal work entrepreneurs should be extended to cover business management, bookkeeping and marketing skills. 2. The sector should be helped by subcontracting jobs by such organizations as schools, hospitals and other institutions. 3. Strict licensing procedures should be applied to give the businesses a formal status of protection and prevent the unchecked growth of this sector. -4. There should be a clear master plan by private organizations and the government

to assist the informal metal work entrepreneurs.