Some Factors Influencing the Performance of Small Scale Industries."a Case of Kiambu Town

Abstract

Kenya being one of the less industrialized countries has found itself concentrating on small scale industries due to the fact that the initial investment requirements for large industries is unaffordable for most citizens, among other restricting factors. To promote industrialization the Kenyan Government has tried to aid small scale industries (SCIs) in order to provide Kenyan products and services and employment to the unemployed, in addition to other roles played by small scale industries. These small scale industries have faced various barriers in their struggle for survival in Kenyan and export market, environments which are quite competitive. Due to SCI'~ role in the society it is important to protect their co-existence In competition with the large scale industries. Knowledge of the factors that are considered to be important by existing and potential entrepreneurs, is valuable to entrepreneurs and government, non-governmental organization and financial institutions, all who have vested interest in these small scale industries. A lot has been done to identify the factors affecting performance of small scale industries in general, among such researchers are, Harper (1973,75), Mwangi (1975), Arap Kessio (1981), etc. But given that each and every location has different environmental conditions, different factors tend to affect each organization differently. This is because some of these factors are area specific. Therefore its necessary to try and identify the major factors influencing small scale industries in a given environment since it is the starting point to help them survive in this very difficult business climate. As the saying goes problems identified are half way solved. This study confirmed that there are both external and internal factors that influence the performance of small scale industries in Kiambu town. The internal factors included training (managerial and marketing competence), family size, source of finance, bookkeeping, marketing research, promotion activities and planning. Whereas external factors included availability of capital,market and raw materials, competition, closeness to Nairobi, structural adjustment policies, technology appropriateness and availability, interest on borrowed capital, finding new customers, product pricing, planning for market expansion and determining and maintaining product quality. The level of importance attached to these factors can be seen by the ranking in Table 31 in the text. Further it can be noted that the town's major problem is a marketing one which is denoted by the factors rated highly or whose percentage levels and dependency relationship proved likewise, . for instance, type of consumer served, availability of market, closeness to Nairobi among others. But it is worthwhile noting that failure is not the ultimate destiny of these small scale industries if given the proper assistance and support.