Factors influencing growth of micro and small Business enterprises in Oyugis town, Rachuonyo South district; Homa-bay county

Abstract

A large majority of firms worldwide are Micro and Small business Enterprises and are playing a significant economic role in many Countries. There is therefore a broad consensus that a vibrant MSE's Sector is one of the principal driving forces in the development of market economy. According to a World Bank report (2001), MSEs are regarded as offering an alternative route to economic growth especially in the context of increased poverty and unemployment. This study sought to examine the influence of level of education; vocational training of entrepreneurs; access to business finance; gender factor and level of security on the growth of Micro and Small business Enterprises in Oyugis town Rachuonyo South District, Homa-Bay County. This research study sought to help all stakeholders (especially entrepreneurs and the Government) to come up with policy documents geared towards assisting in both the establishment and management of MSEs in Kenya in generally and Oyugis town in particular. The study employed stratified random sampling in its sample selection and collected data from 226 businesses in Oyugis town. Research instrument used were questionnaire (structured and unstructured) and interview schedules to collect data from the respondents. The data was analyzed descriptively (by use of qualitative & quantities techniques) and presented through frequency tables and percentages. Data was processed using statistical package for social scientist (SPSS). The findings revealed that youths were the majority entrepreneurs within Oyugis town. There were more men (56%) than women (44%) entrepreneurs. Education level had influence on business growth with 76.2% of respondents agreeing that it hindered their business performance. 58.0% of the respondents agreed that their education level had helped them with business management and planning skills. 70% of the respondents operating MSEs were not operating business along their profession. 53.2% of the entrepreneurs within Oyugis town had attended vocational business training with 38.6% having attended training on field excursions and seminars. The research also found that insufficient funds had hindered growth of micro and small business enterprises with 48% of MSEs being able to sustain themselves without financial or credit facilities. 53.1% of respondents cited gender biasness in accessing loans facilities. Insecurity was recorded in Oyugis town with 61.4% of the respondents citing insecurity. In view of the above findings, the study recommends that the government should remove unfavorable and punitive regulatory framework that negatively affects the performance of SMEs. Further, promoting certain entrepreneurship practices will help more start-ups survive beyond the first year of operations and remained sustainable. The study concluded that business success is a consequence of embracing a mixture of strategies and policies to support MSEs as they strive to grow. Areas which could form part of further studies include; information and communication technology and its influence on business growth, business location and its influence on business growth and also the relationship between firm's age and its growth.