Uptake of government tenders by youth - owned small and micro enterprises in Nairobi city county, Kenya

Abstract

Government is often the biggest customer within a country, and governments can potentially use this purchasing power to influence the behavior of private sector organizations. Most of the government spending goes to procurement. The Small and Micro Enterprises (SME) sector is a major employer and driver of economies worldwide. The development of interest in (SME‟s) has been remarkable in the recent past, especially with governments. As a result, preferential treatment of the SME‟s has gained strategic visibility in public procurement and governments are implementing the same across the world. This study sought to examine factors that influence the uptake of government tenders by youth -owned small and micro enterprises in Nairobi County, Kenya. It was guided by three specific objectives: To establish the extent of uptake of government tenders by the youth in Nairobi County, Kenya, determine the factors that influence the uptake of government tenders by youth -owned small and micro enterprises in Nairobi County, Kenya and identify the relationship between the factors identified and the uptake of government tenders by the youth in Nairobi County, Kenya. The study employed a descriptive research design. The population consisted of 370 youth owned SMEs registered with the national treasury in Nairobi County. A sample of 52 firms was selected from the sample using stratified random sampling method. Primary data was collected from business owners/managers using a semi-structured questionnaire. Data was analyzed using SPSS with the main analysis tools being frequencies, mean and standard deviation, factor analysis and multiple linear regression. The study found that the youth in Nairobi City County are participating in government tenders to a moderate extent. Six factors that influence the uptake of government tenders were identified through factor analysis. These include: Legal/Regulatory framework, financial access, framework contracting, ethical issues, complexity of the public procurement process and information access. All these variables were found to have a positive relationship with the youth uptake of government tenders which was also statistically significant at 95% confidence level. The study was faced with a number of challenges including insufficient time and lack of commitment by the youth to voluntarily give information which they considered confidential. It was suggested that since the present study focused only the youth who are registered with the national treasury, future studies should consider expanding the scope by including those entrepreneurs who are not registered but operate in the informal sectors