The Influence of Social Capital on the Growth of SMEs in Nairobi County, Kenya

Abstract

This study aimed at establishing the influence of social capital on the growth of SME‟s in Nairobi County. Descriptive research design was used. The target population consisted of all SME‟s operating in the Nairobi Business District with a sample of 100 taken. Respondents were CEO‟s or persons in charge of finance department. A questionnaire was used to collect data. The response rate represented 57% of the overall study. In the analysis, growth indicators of profitability, number of employees and sales turnover were used as the dependent variables. Trust, Civic engagement and culture were the variables used to measure social capital. Correlation and regression analysis were used to analyse the relationships. The study found out that social capital affects the growth of SME‟s. However, the nature of the relationships differed with each growth indicator and each social capital variable. A further research can be undertaken to understand why culture and civic engagement variables have negative effects on the growth of SME‟s. A thesis can be developed and tested to understand the relationship in a better way.