AN ASSESSMENT OF THE EFFECT OF BUSSINESS ENVIRONMENT ON THE GROWTH OF SMALL AND MICROENTEPRISES CHAPTER ONE 1.0 INTRODUCTION.........1 1.

1Research Background.........1 1.2Research Problem Statement..........1 1.3Research Objectives...............2 1.4Research Questions.................2 1.5Significance of Study..........2 1.6Research Scope.......3 1.7Definition of Key Terms.........3 CHAPTER TWO 2.0 LITERETURE REVIEW 2.1 INTRODUCTION.....4 2.2 Theoretical Orientation......4 2.2.1 Capability Theory...4 2.2.2 Behavioral Theory......4 2.2.3 Dependence Theory........4 2.3 Empirical Review..5 2.3.1 Research Gaps....5 2.4. Conceptualization...6 2.4.1 Conceptual Framework..7 2.5 Operationalization...7 2.5.1 Operational Framework..7 CHAPTER THREE 3.0 RESEARCH DESIGN AND METHODOLOGY 3.1 INTRODUCTION.8 3.2 Research Design ...8 3.3 Study Population....8 3.4 Sampling Design....8 3.4.1 Sampling Techniques..............9 3.5 Data Collection..........................................9 3.5.1Data Collection....................9 3.6 Data Analysis and Reporting.9 3.7 Ethical Issues.........9 3.8 Limitation of Study....9 iv CHAPTER FOUR 4.0 DATA PRESENTATION ANALYSIS AND INTERPRETATION 4.1 INTRODUCTION.........11

CHAPTER FIVE 5.0 Findings, conclusion and recommendation. 5.1 Introduction........15 5.2 Summary of findings......15 5.3 Conclusion......15 5.4 Recommendation for further research....................15 LIST OF ABBREVIATIONS SME: Small and Microenterprises ETR: Electronic Tax Register LIST OF TABLES AND CHARTS Table 3.1 Target Population Table..............................................................................................8 Table 3.2 Sample Size Table.......................................................................................................9 Table 4.1 Training Factor Table.................................................................................................11 Table 4.2 Credit Factor Table.....................................................................................................12 Table 4.3 Security Factor Table..................................................................................................13 Table 4.4 Government Regulation Table....................................................................................14 Chart 4.1 Training Chart.............................................................................................................12 Chart 4.2 Credit Chart.................................................................................................................13 Chart 4.3 Security Chart..............................................................................................................14 Chart 4.4 Government Regulation Chart.....................................................................................14

ABSTRACT Business environment is concerned with understanding the factors in the environment which influence the success. The main objective is to establish the challenges in the business environment affecting the growth of small enterprises on the activities with a specific reference to Kapsoit Market. These challenges have a critical impact on the activities of small Enterprises and lack effective solutions to manage business growth challenges. The challenges are government regulations; licensing and high taxes. Access to credit/capital security, lack of training entrepreneurial literacy. Questionnaire was the major data collection instrument and was issued to the respondent through the use of stratified random sampling technique. The data to be collected was analyzed through the use of quantitative analysis. This will contribute towards the making of summary findings and answering research questions.

vi CHAPTER ONE

INTRODUCTION RESEARCH BACKGROUND Business environment is concerned with understanding the factors in the environment which influence the livelihood of small firms success. Therefore it is a combination of the social, economic and political factors which influence the growth and operation of an enterprise. Managing the business environment requires analyzing the sources of uncertainty which hinder the growth of the enterprise are government regulations, competition security, financial institutions, access to credit and lack of training. Entrepreneurs can reduce the environmental uncertainty by adapting and changing actions to fit the business environment. Also scanning the environment to anticipate changes, finally lobbying to achieve favorable outcomes and small enterprises will adapt to the business environment and thus increase effectiveness. Sessional paper no. 2 of (1992) on small microenterprise in Kenya enumerates the need for improving the business environment in order to assist the growth of small enterprise sector and for survival. To survive in a dynamic environment medium enterprise need to have strategies that focus on the customers and thus the bus sines will have a competitive advantage over others. It is important to understand the meaning of small market share, employ few employees (less than 10, uses very basic technology and have a turnover of less than Kshs 10 million annually. Since independence in 1963, substantial funds have been spent to implement government policies and programmes, and to build institutions aimed at promoting the small enterprise sector. However, results to date have not been satisfactory due to poor coordination among implementing agencies. In addition many programmes ave not been based on adequate needs assessment. As a result, much of the growth of the small enterprise sector has been spontaneous especially among "jua kali" enterprises. The sector has reached a stage at which further growth is not possible without strong and effective support from the government, the business community and the people at large to coordinate. The indication that enterprises have been able to graduate into the formal sector. The term "Jua Kali" comes from two Swahili words, Jua meaning, sun and Kali for hot. The s all scale workers in the enterprise working by manufacturing and providing services in open air under the sun are generally referred to as "Jua Kali", although characterized by absence of premises. (William, 1997) The history of "Jua Kali" started on a traditional basis in the form of small industries dealing with blacksmiths. The advent of Asians coming to Kenya marked the gradual sift to home based activities to urbanized enterprises. However with time they expanded by producing a wide range of products. Today these enterprises are of potential and benefit to the contribution to the economy in terms of output of goods and services, creation of jobs at relatively low capital among others (republic of Kenya vision 2030). Kenya's medium enterprises are undergoing drastic changes and challenges of growth. These changes include competition, time, constraint-multiple roles played by women, limited management skills and record keeping lack of business knowledge and skills, licenses taxation and other actors in the business environment which fail to address this may risk the enterprise future success (Ongile 2006). The study found out the effect of the business environment on the growth of small and microenterprises in Kapsoit Market. 1.2 Research Problem Statement The major objective of having a favorable business environment is to enhance the growth of small and microenterprises making the entrepreneurs more motivated to conduct business. Many small and 1 microenterprises record decline in growth rate despite the efforts by enterprises growth. It has been of little help since the growth rate of enterprises especially in rural areas is still a problem (Omiti, 2001).

According to McComick (1996) government regulation fails to enforce delivery and affordable final services to individuals operating small scale enterprises. The government lacks special regulations that support the growth and development of small and micro-enterprises for example the problem of high taxes and licensing fee of which they are difficult to company to condition. Capital, access to was major problem affecting the growth of small scale enterprises. A small and microenterprise relies on savings, profit proceeds, as the main source of capital for businesses expansion. Credit was also a major problem this is because of stringent collateral requirements, negative attitude of lending institutions toward small and micro-enterprises borrowers. Security is a major problem affecting the operation of small and micro-enterprises. This is a challenge because most of them are attacked in the area of operation, conned off their money and it affects the growth of the business. Training/entrepreneurial literacy is a major problem lack of business management skills, literacy on long terms, conditions, repayment make it not possible to access funds even when the funds are available. The challenges in the business environment hinder the development and growth of small-micro enterprises and failure to address can lead to lack of jobs ovation, income generation, decline in the growth of the economy (Mullei 1999). The purpose of the study is to identify the gaps of small and micro-enterprises in Kapsoit Market. In doing so the study addressed the following research questions. Many of the businesses are affected by the problems in the business environment which hinder their growth rate. 1.3 Research Objectives General Objectives The purpose of the study was to assess the effect of business environment on the growth of small micro-enterprises in Kapsoit market. Specific Objectives This was guided by the following objectives: i.To assess the effect of government regulation on the growth of small and microenterprises ii.To find out the effect of security on the growth of small and micro-enterprises. iii.To establish the effect of training on the growth of small and Micro-enterprises. iv.To analyze the effects credit/ capital on the growth of small and microenterprises. 1.4 Research Questions In order to meet the research problem statement, this study answered following research questions. i.How docs government regulation affect the growth of small and micro enterprises? ii.How does security affect the growth of small and microenterprises? iii.How docs training affect the growth of small and microentrepriseses? iv.How does access to credit/capital affect the growth of small microenterprises? 1.5 Significance of The Study The study is of great significance to owners and managers of small and microenterprises because it helps to know the problems of running the business and provide solutions. Investors become aware of the risks associated with small enterprises. The study helps the government economy since small microenterprises contribute to the economic development of a country. It also helps,to highlight government regulations which support growth and development of small microenterprises for example high taxes, licensing to be dealt with.

2 The study was helps the unemployed because it provides them a way they can start earning and thus improves the living standards of the people. The study benefits entrepreneurs to enhance knowledge of

the ever growing small andmicroenterprises in Kenya and provide the researcher with an insight into the challenges encountered in the business environment by small enterprises. The study will be of importance to the researcher as it will be a partial fulfillment of a degree course in bachelor of business administration specializing in entrepreneurship. The lecturers and students will use this research for reference and find out other issues in order to come up with conclusive reports. 1.6 Research Scope The study was confined to small and microenterprises in Kapsoit market. The target population will included owners of Jua Kali enterprises, Managers, employees of small scale at Kapsoit market. The study addressed challenges in the business environment which affect the growth of small and microenterprises. 1.7 Definitions of Key Terms Growth : Refers to increase or develop rapidly Business Environment : Concerned with understanding the factors in the surrounding influence the livelihood of small firms success. SME: Small institutions that are operated with very little capital, managed with a small market share, employ few employees ( less than 0) uses basic technology Entrepreneurs: A person who scans the business environment, identify opportunities and get the necessary resources to start a business. Enterprises: An undertaking especially one scope,complication and risk; a business organization. Policy: A plan of action adopted by an individual or social group. Sessional paper: constitutes the government policy on issues; education, environment, gender specific issues, credit. Blacksmith:A trades person trained in hoof care and horseshoeing,one that forces and shoes iron Training: Refers to acquisition of knowledge, skills and competencies as a result of vocational or practical skills.

CHAPTER TWO LITERATURE REVIEW 2.1 INTRODUCTION The chapter reviewed the major challenges relating to business environment on growth of small and micro-enterprises. It provides explanation of theoretical rational problem being studied as well as what the research has done and how findings relate. The chapter explains theoretical orientation, empirical review, research gaps, conceptualization and ope-rationalization. The literature will be reviewed from journals, published reports and papers. 2.2 Theoretical Orientation The proposed theories that will be discussed in the study are: 2.2.1 Capability Theory Lewis, W.A (1954) there are also indicators that small and micro-enterprises complete by meeting new demands for quality, productivity, reliability, innovation, flexibility and a capacity to adapt to changing needs. Small enterprises, therefore may have advantages in this regard to various qualitative aspects of employment are present. This includes for example superior labor relations and opportunities for worker participation, good working and community conditions progressively improving skills and equipment and the adoption of adequate social protection mechanism. In fact good conditions and a capacity to meet current competitive needs may be mutually supportive and may provide a basis on which small enterprise development can be more effectively positioned. 2.2.2 Behavioral Theories. Douglas North, (1990) understand Institution as the rules of the game within a society, which structure Individual behavior thereby reducing uncertainty risk and transaction costs connected with each individual action. He distinguishes between formal institutional framework to foster entrepreneurship consist of the fundamental, political, social and legal rules, example of the formal institutions include the legal framework and financial systems. Informal rules refer to codes of conduct and interpretation of laws and regulations which further regulated economic actions. 2.2.3 Dependence Theory Berry, A (1996) Dependence theory is a body of social science theories, both from developed and developing nations that science theories, both from developed and developing nations that create a world-view which suggests that poor underdeveloped states of the periphery are exploited by wealth developed nations of the center, in order to sustain economic growth and remain wealthy. This theory states that poverty of the countries in the periphery is the result of how they are integrated into the world system, whereas free market economist argue that they are progressing to full integration. The theory claims that the theory of comparative advantage breaks down when capital including both physical like machines and financial capital is highly mobile as it is under the conditions of globalization. For this reason, it is claimed that dependency theory can offer new insight into a world of highly mobile multinational corporations.

2.2.4 Theoretical Framework Fig 2.4 Theoretical Framework Capability Theory

Behavioural Theory Dependence theory

Growth of small and microenterprises

Source; Author (2010 2.3 Empirical Review Kibaki (1996); lack of good infrastructure, including roads, electricity, security, government/policies hinder the growth of small and microenterprises and are factors that cause a challenge in the business environment. Lisa Donald (2003) small and microenterprise are common in developing countries. Studies estimate that small enterprises employ 17% of the adult population 605 to 90% of the labor force work in agriculture majority of these enterprises make their contribution in terms of poverty alleviation growth of the economy, hoping participants move substantially above a poverty line. A 1995 survey of 11,012 small business enterprises undertaken by KREP and GEMINI project indicate that overall employment growth in the sector between 1994 and 1995 was 10-12 per Annam. William Cooley in the journal of small business management of 1st Jan 1997 on small scale enterprises in Kenya noted that as the business grows and develops additional capital is needed for expansion and lack of capital/access to credit is a great problem affecting the sector. According to Arvil vs Adams (1997) training may not achieve its objectives for the training to produce activities. Not all training of informal sector artisan occur at specific work sites. In 1994, the Kenyan micro and small enterprise training technology was launched with the objective of promoting micro and small enterprise. The conclusion was that 905 subsidy of training provided by the voucher program had increased the amount of training for Jua Kali employees. The past studies shows that young microenterpnses are vulnerable to general economic conditions and rarely grow because of the problems they face in the business environment. 2.3.1 Research Gaps The study identified the gaps that have not been addressed on the effect of business environment on the growth of small and microenterprises. Many small scale enterprises face problems of access to credit; banks are not predisposed to lending to small enterprises, the small borrower who lacks experience with credit institutions . Finally the stringent collateral requirement which poses a 5 challenge to the growth of the enterprise hence difficult to conduct its operations.

Training affects most people in the sector. Many owners of SMEs lack knowledge on records keeping, business management skills and they are not aware of new technology appropriate for small enterprise: and hence affects the growth rate of the enterprises if they are unable to know emerging skills needed in business. Government regulations fails to fulfill the demands of small enterprise this is because of the high taxes charged on the sector, too much bureaucracy during licensing procedures which is unfavorable to the small enterprise owners. Finally the local authorities fail to improve on infrastructural facilities i.e security which is a great problem to the growth of the sector 2.4 Conceptualization To conceptualize is to determine what to measure in order to asses the factors in the business environment that affect the growth rate by financial institutions provide services that help small scale entrepreneurs to raise funds, acquire credit. They are great importance since they help in providing business support activities and without their support business would be difficult. Capital Most small enterprise lack capital or cannot access credit and thus difficult in the business environment to carry its operations and means decline in growth rate. Infrastructural Activities Many small enterprises experience problems in of infrastructural facilities in the operation i.e security and when they lack security it hinders the operation and no operation takes place smoothly and there if need to address. Training Training is a continuous investment that leads to skilled workforce, trained staff overcomes the challenges it poses because their productivity is high Lack of training leads to collapse of the microenterprise and thus needs to be addressed in order to increase the growth rate. Government Regulation There are factors to be considered when starting a business they are important but on the other hand, the high taxes drain a lot of profit and leaves enterprises with no funds. The cost of obtaining license is high and it involves compliance that discourages many to invest.

6 2.4.1 Conceptual Framework Fig 1.2 Independent Variable

Independent Variable Training Access to Credit

Dependent Variable

Growth of Small and Government Regulation Micro-entreprises

Security Source: Author (2010) 2.5 Operationalisation To operationalise is to determine how to measure,the operationalization of this study demonstrates the key factors leading to existence of challenges in business environment and the growth of small scale enterprise. To asses the impact of financial institutions on the growth of small and microenterprises. The study measured the effect of access to credit provided by various financial institutions, determined by how small scale owners access credit. It find out the impact of infrastructural activities i.e. security. The study found out challenges it poses. 2.5.1 Operational Framework Fig: 1:3 Independent Statistics Security Electricity

Infastructural activities

Growth of small and micro-enterprises

Financial institutions

Capital Credit Facilities

Trainig

Business Skills Education Level E.T.R Business License

Government Regulation 7 CHAPTER THREE 3.0 RESEARCH DESIGN AND METHODOLOGY

3.1 INTRODUCTION This chapter discuses the research design and methodology of the study; these entails the methods and procedures that will assist the researcher in identifying the sources of data. The sampling method used, the sampling design and sample size. It further explains data analysis procedure. 3.2 Research Design Descriptive research design was applied in the study. The objective of this design was to portray an accurate profile of person, events or situation. It further seek to establish factors associated with certain occurrences, outcomes and conditions. According to Mugenda and Mugenda (1999) descriptive statistic are indices that describe a given sample and relationship. It used survey design as a strategy of collecting and analyzing data in order to answer questions about the stated problem under investigation. The study accessed the effects of business environment on the growth of small scale enterprises. Questionnaires were administered to gather information. 3.3 Study Population A target population is the total collection of elements which are wishes to make some inference. Mugenda and Mugenda, (2003) the population under study included owners, managers, employees, customers of small and micro enterprises at Kapsoit Market. TABLE 3.1 Target Population Category Owners Managers Employees Customer Total Source: Author (2010) Target Population 16 20 24 20 80 Percentage 20.00% 25.00% 30.00% 25.00% 100.00%

3.4 Sampling Design Probability sampling design was used where a sample of respondents were chosen for the study using stratified random sampling procedures. Managers were be selected using census method and the respondent employees were obtained from from each category of the target population. respondent employees will be obtained from various subgroups.50% of respondents were targeted

8 3.4.1 Sampling Method Techniques

The study used probability sampling method where stratified random sampling techniques were used to select respondents from target population , target population was divided into subgroups and respondents picked randomly from each. The sample size was as follows TABLE 3.2 Sample Size Category Owners Managers Employees Customers Total Source: Author (2010) 3.5 Data Collection Data collection is gathering information relevant to the research study. The data was gathered through the use of the following methods. 3.5.1 Data Collection Method Techniques The study collected data using primary data through a questionnaire. The researcher personally administered the questionnaire this is because most people do not like filling the qustionnaiere. Also people in the sector are too busy and do not have time to sit and fill a questionnaire. It involved structures and unstructured questions. The data collection instrument was open ended and closed ended question. 3.6 Data Analysis and Reporting Data was analyzed by the use of statistical procedures. Qualitative method involved content analysis and evaluation of text material. Qualitative method will involve/the use of diagrams i.e table charts. 3.7 Ethical Issues. Every enterprise has its own rules and norms of working hence respect for individual rights and obligation was the guiding principal while conducting the research. Consent to make interviews was sought from owners, managers of small and micro-enterprises. The research disclosed all information concerning the main purpose of the research study to keep all data . The researcher upheld some ethical issues in the process of the study and assure the respondents that all information volunteered was treated in the highest confidence. 3.8 Limitation of the Study A number of factors may limit the scope and depth of the study; time: the researcher lacked enough time to do a thorough research this is because of a number of 9 tasks supposed to be done and time was short.

Target population 16 20 24 20 80

Sample size (50% of the target population) 8 10 12 10 40

Openness and honesty of respondents: some respondents are difficult to deal with since they do not want to disclose their business secrets and fear for security. Resources: the researcher lacked enough funds/ resources to carry out the research activities.

10

CHAPTER FOUR 4.0 DATA INTERPRETATION AND FINDINGS 4.1 INTRODUCTION This chapter deals with analysis and presentation of the data collected using various instrumental tools through the use of questionnaires. The questionnaires were formulated to help in the collection of quantitative data. Having received data from previous respondents the findings were presented in tables. 4.2 Purpose of Analysis

The purpose of this study was to find out the effect of business environment on the growth of small and micro-enterprises. In order to try an improve this sector, thus encouraging people to grow their business to large enterprises. 4.3 Response Rate

The study involved 40 respondents drawn from those buying the products, those selling , owners, managers of the enterprises at Kapsoit market. This shows the effect of training factors on the growth of small and microenterprises. Table 4.1 Training factor. Response Greatly causes Slightly causes Does not cause Total Frequency 30 5 5 40 Percentage % 75.00% 12.5% 12.5% 100.00%

Source : Researcher (2010) From the above analysis, the response indicated that training has really a great effect on the growth of any business. Therefore at 75% this means that for any business to grow, the training has to be done in order to achieve goals and to grow o from one level to the next.

11

35 30 25 20 15 10

Greatly causes Source ; Researcher (2010) 4.4

Slightly causes

Does not causes

This shows the effect of quantitative analysis and results credit as a factor affecting growth of small and microenterprises.

Table 4.2 Credit Response Greatly affects slightly affects does not affect total Source; Researcher (2010) Frequency 8 12 20 40 Percentage 20.00% 30.00% 50.00% 100.00%

12

Chart 4.2: Pie Chart showing the qualitative analysis results credit

. . . . . Greatly affects 20% Doesn't affect 50%v .. .....

X X X

Slightly affects 20%

...........xxxx

Does not affect ...... Slightly affects

XXX

Greatly affects

Table 4.2 and pie chart 4.2 are concerned that majority of the respondents found that credit does not affect the growth of small and medium since these days entrepreneurs can acquire loans without security one such example is from Equity Bank where one only needs to open an account with them and then show the sales return and then based on that one qualifies for a loan. 4.5 Effects of security on the growth of small and micro enterprises. Table 4.3 Security Response Low Medium High Total Frequency 5 15 20 40 Percentage % 12.5% 37.5% 50% 100.00%

Source: Researcher (2010) Table 4.3 and chart 4.3 exhibits that majority of the respondents admitted that the rate of security was high in the growth of small and micro-enterprises.

13 Chart 4.3 showing the effects of security on the growth of small and microenterprises ..... Low 12.50% High

. . . . . . . . . . High 50% ...... xx xxx

X X X X X X X X X X X

Medium 37.50%

Low

xxxxx

xxx

Medium

Source; Researcher (2010) 4.6 Effect of government regulation on the growth of small and micro enterprises Table 4.4 Government Regulation Response Greatly causes slightly does not cause Total Source; Researcher (2010) Table 4.4 is concerned that government regulation have some effects on the growth of small and enterprises and the majority of the respondents exhibit this Chart 4.4 showing effects of government regulations Does not cause 12.50% ... Does not cause Slightly causes .... 25.00% ........... xxxxxxxx greatly causes xxxxxxx x x x x x x xx x xxxxxxxxx Frequency 25 10 5 40 Percentage 62.5% 75% 12.5% 100

... xxxxxxxxxxxx Slightly xxxxxxxxxxxxxx

xxxxxxxx Greatly causes

xxxx

Source: Researcher (2010) 14

CHAPTER FIVE 5.0 5.1 SUMARRY, CONCLUSIONS AND RECOMMENDATION INTRODUCTION

This chapter of the research project presents in a prease way the summary and answers to research questions, conclusions, recommendations and suggestions for further research. It points out the factors influencing the growth of small and microenteprises . In Kapsoit market and what applications of the study can serve to solve these problems. 5.2 Summary The findings of the research study are as follows: the study revealed that training greatly affected the growth of small and microenterprises in Kapsoit market. It implied that training is a key tool in any business growth. This was revealed from the high percentage at 75% of the total sample of 40 people who were questioned. Another factor to the growth of small and micro enterprises was attributed to government regulation which was ranked at 62.5% from the analysis that was obtained from the questionnaires that were assembled. Security on the hand was perceived to be at the lowest percentage with 50% rating as one of the factors attributed to growth of small and microenterprises. This is because people were of the opinion that security can be managed if there is togetherness with other people working at the same venue. 5.3 Conclusion There is a proof to suggest that most of the respondents have been involved in small and microenterprises somewhere along the way but they have failed to grow. Therefore, by this report, there could be a clear indicator on what the various parties can do in order to encourage and grow this sector . The study concluded by asking the government to try and assist this sector by providing rules and regulations which are favorable.More banks and financial institutions were encouraged to give more financial support to the sector in order to increase their capital and expand their business and improve their living standards through the poverty eradication scheme which was introduced in the country with the help of united nation environment programme (U.N.E.P). 5.4 Recommendation The government should try to assist by providing regulations which are favorable to be imposed on small and microenterprises.

The government should waive taxes so that the small and microenterprises can enjoy doing business. If encouraged to venture into business and not only to start but to try to sustain it to grow.

15 The government should also waive taxes so that the small and microenterprises can enjoy doing business. If encouraged to venture into business and not only to start but to try to sustain it to grow. The government should also open up many centers which can give information to the small and microenterprises and also try to inject more capital in enabling the sector to market their products and services across boarders into other countries. The sector should try to improve on their product and service quality so that it can attract more consumers to buy their products and service quality so that it can attract more consumers to buy their products leading to expansion of markets. The sector management should try to improve on their management skills or strategies to be able to capitalize maximize on their resources. They should train their employees so that they are able to carry on the functions that the business entails. The management should also learn to plan so that when they roll out their goals and objectives every employee is able to move in the same direction. Also the study recommends that the management should try to improve on the working environment of its staff by providing them with competitive pay, leave days, medical cover. This helps build the morale of the employees and as such their input will be enhanced. Finally growth is regarded as essential, the small and microenterprises will be the main engine of development, government will provide strategic policy and investment support for infrastructure,, service delivery and marketing thus participation will be encouraged.

5.5

Recommendation for Further Research

Due to limited time, resources and inaccessible, data the researcher was not able to come up with a conclusive research findings, but it is advisable to have further research done in this area so that we can be able to know more about the factors affecting growth of small and microenterprises in the business environment and how this sector can benefit our fellow upcoming Kenyans to achieve the vision 2030.

16 REFERENCES Government of Kenya (1993) small enterprise and "Jua kali" development in Kenya Sessional paper no 2 of 1992 Nairobi; Government printer. Homby A.S (2005) Oxford Advanced learners Dictionary of current English, Seventh Edition, Oxford University press. Mullei, A (1996) small enterprise development in developing countries, Oxford university press. Me commick (1996) The African factor in enterprise structure and performance in Kenya, Oxford University press. Mugenda and Mugenda (1999( Quantitative and qualitative analysis. National Baseline survey 1993, 1995). "National micro and small enterprise baseline survey Gemini studies. Omiti (2000) Micro-evidence on firms and Household held at the center for study of African Economies, Oxford University press . Republic of Kenya vision 2030 William Coolcy (1997) small scale manufacturing in Kenya Government printer.

APPENDIX -1 Questionnaire NB: Please tick where appropriate 1.Gender: 2.Age : Female 21-30yrs Male 31-40yrs 1 yr- 2 yrs 5 yrs and above 41-50yrs 2 yrs -3 yrs

3.How long have you been in business? 3 months- 1 yr I 3 yrs - 5 yrs

4.Small and micro-enterprises face challenges in the business environment including security, access credit, capital, lack of training , government regulation. How is the government performance in creating an enabling environment? Very good effectiveness. Agree Strongly Agree Yes Agree Strongly Agree Agree Strongly Agree Agree Strongly Agree Disagree Strongly Disagree No Disagree Strongly Disagree Disagree Strongly Disagree Disagree Strongly Disagree Good Fair Poor 5.The government should seek entrepreneurs opinion before formulating policies to ensure

6.Are most of the government regulation implementable? 7.Currently, most entrepreneurs are challenged by poor infrastructural activities.

8. Does lack of training affect the growth of small and micro enterprises?

9.The problem of access to capital is a challenge in the enterprise.

10.The government should facilitate an enabling evironment. In your opinion what should the government do to achieve this? Briefly highlight........................................................ ........................................................................................................................................ ......................................................................................................................................... ......................................................................................................................................... 11.Lack of credit is the most constraining factor to business expectations and contributing to high percentage of business closure Agree Strongly Agree Disagree Strongly Disagree

12.What challenges do you face while obtaining creditor loans from micro finance institutions or banks? Briefly explain................................................................................. ........................................................................................................................................ 13.Do you face challenges while obtaining licenses and permits for your business? Yes No 14. If yes briefly explain.......................................................................................................... ........................................................................................................................................ 15. Innovation potential exists in many small enterprises; do you get any assistance to tap and grow such innovative skills? Yes No If yes briefly explain......................................................................................................... ...................................................................................................................................... 16.Does the government support you in terms of guidance, counseling, technical and training for your businesses. Yes If yes briefly explain how ................................................................................................................................. ................................................................................................................................. 17.The government has increased education for both men and women entrepreneurs and has developed support structures to ensure success for their businesses No

Agree Disagree micro enterprises Agree Strongly Agree

Strongly Agree Strongly disagree

18.Support from the government greatly contribute the development and growth of small and Disagree Strongly disagree

APPENDIX 11

Work plan Schedule of Research Activities Activity Proposal defense Questionnaire design Data collection Data analysis Writing research paper Consultation with supervisor Submission of report Jan 2010 Feb 2010 March 2010 April 2010