The Effect of Constituency Development Fund on Small and Medium Size Enterprises' Investment Returns in Kajiado North Constituency

Abstract

The purpose of this research study was intended to find out the effect of CDF investments projects on six factors on SMEs investment returns and if any how. The recent poverty ranking in the economic trends of the constituency led to low poverty index measure and to go further to establish the major contributory factor (s) to such high scores, through the use of SMEs and how CDF kitty is being managed. The methodology used to analyze the CDF projects is by grouping them into 6 factors as supported by CDF, which includes education, health, water! sanitation, security, roads, financial support and electricity. The factors were identified as major and respondents were asked to choose the most important to the least and also rank them in order of priority. A questionnaire was circulated to the respondents to fill. From this study it is evident that there is an effect on SMEs investment returns and expansion, once any of the six factors were carried out in the constituency. The factors have a multiplier effect to support in opening up of regions that were hitherto undeveloped and created opportunities to tap. The fiscal decentralization should be enhanced and to ensure there was clear guidelines for monitoring and evaluation purposes. SMEs regulation and legislation mechanisms should be put into place, since they are earmarked to support the economy's GOP by almost 40% and also creates employment to many people. Due to the devolution of power from centralized governance, it would be idea to ensure funds to constituencies are continuously availed without any delay. Cost benefit analysis is used as a bench mark in appraising CDF investment projects to include the social and financial costs and benefits accruing from the project.