The Effects of Rural Electrification on the Growth of Small and Medium Enterprises in Mbita Town

Abstract

This study sought to investigate the effect of national grid connection to the SMEs in Mbita town. Findings from various studies have indicated that many SMEs have embraced various strategies in their effort to improve productivity but the source of power to run modern machinery remains a challenge, resulting in well-formulated SMEs that fail at the effort of trying to expand or add value to their existing products and services. This study departed from the previous studies looking into several causes of rural underdevelopment but instead endeavoured to establish the impact that connection to the national grid had on the SMEs. To achieve the main objective, a descriptive survey of SMEs in Mbita town conducted from a population frame of 280 businesses operating in and around Mbita town. The target population was all the SMEs in town plus its environment. Statistical inferences using correlation and regression analysis indicated that a high reliability was achieved by the data collection instrument. Both tests of correlation using asymptotic significance indicated a strong relationship between connection to the national grid and value addition services in the town. The study recommends that the government in concert with electricity service providers to reduce installation costs as well as introduce subsidies to help more SMEs connect to the national grid. Awareness campaigns were also recommended on the advocacy to help more people connect to the national grid. This enabled a conclusion to be made that connection to the national grid was the motivation for value addition services as well as expansion of SMEs in Mbita town.