ENTREPRENEURSHIP SKILLS AND PERFORMANCE OF SMALL

AND MEDIUM ENTERPRISES (SMEs).

A CASE STUDY OF ADOLESCENT GIRLS INITIATIVE (AGI)

PROJECT

UMUGANWA JANE KARAGIRE

MBA/0483/13

A Research Project Submitted in Partial Fulfillment for the Award of a

Degree in Master in Business Administration (Project Management
Option) of Mount Kenya University

SEPTEMBER 2014
 DECLARATION

Declaration by the candidate

This research is my original work and has not been presented to any other institution. No

part or whole of this research should be reproduced without permission from the author’s

consent or that of Mt. Kenya University.

UMUGANWA JANE KARAGIRE

Sign ____________________ Date _____________

Declaration by the supervisor(s)

This research project has been submitted with the approval of The Mt. Kenya University.

Supervisor (s).

Name: FABIOLA NIBYIZA

Sign ____________________ Date _____________

For and on behalf of Mt. Kenya university

ii
 DEDICATION

I dedicate this book to my late beloved mother for her great love, sacrifice and

inspiration. To my husband for his love, encouragement, support and prayers. To my

children and brothers.

iii
 AKNOWLEDGEMENTS

I thank almighty God for his protection, guidance and provision throughout this study and

for the protection of my family and relatives. Special acknowledgement and my heartfelt

thanks to my supervisor Madam Fabiola Nibyiza for the support, wise guidance and

valuable feed back during my research process. Your skills and efforts made it possible

for the success of this project and I am so grateful to you, God bless you. To Mount

Kenya University and to all my lecturers, l would like to express my warmest gratitude

for the skills and knowledge l have attained. I am especially indebted to Father Jean

Pierre for the enormous help to me during my studies, and to all my colleagues in project

management. My special thanks to my husband for his invaluable assistance,

encouragement and advice during my study. Great thanks to my children for

understanding me during the difficult times of our separation, for your prayers and

tolerance for the whole period of my study. Thanks to all of you and may God bless you

all abundantly.

iv
 ABSTRACT

The Rwandan government envisions to create a middle-income, knowledge-based society

with a middle class of entrepreneurs as the backbone of development processes in which
women and men equally participate. As a result, many women have been starting
businesses and the percentage of female owned enterprises in the capital currently is 43.1
percent. Nevertheless, a lack of education and skills has been identified as
performance barrier of women owned enterprises and across Rwanda self-employed
women have indicated a need for education and training in order to improve their
business practices. Adolescent Girls Initiative (AGI) is a project initiated and supported
by World bank in collaboration with Ministry of gender and family promotion
(MIGEPROF) and Workforce development authority (WDA). It is a project in its pilot
stage in a period from 2012-2014 and its aim is to help adolescent girls and young
women make a successful transition from school to work. It educates and train adolescent
girls and young women in entrepreneurship skills in order to start and grow their SMEs.
Training at Nyarugunga Technical Vocational Education and Training (TVET). Members
train in Culinary, Food processing/Milk, fruit and juice processing, others in hand craft.
This study analyzed the contribution of entrepreneurship skills and its impact on the
performance of Small and Medium Enterprises, (SMEs) owned by these girls and women
in Kigali city. The study also assessed the extent to which education and training
influenced the performance of SMEs and challenges faced by young entrepreneurs to
grow and develop their enterprises. Data for this research included both secondary and
primary data. Secondary data involved the works of scholars, publications, reports from
ministry of finance, trade, private sector federation (PSF), Work Force Development
Authority (WDA), World Bank, (MIGEPROF), (TVET), and Internet. Primary data
involved interviews done face to face with the respondents. Data were analyzed both
quantitatively and qualitatively. A sample of 136 respondents taken from a population of
208 respondents, of which 98 questionnaires were answered and returned. Survey design,
Simple random sampling was applied in the process. Basic questions, structured
questionnaires and unstructured questionnaires were given to respondents and Interviews
held with top officials and trainers of Adolescent Girls Initiative (AGI) project, in
Nyarugunga as well as heads of SMEs. Data collected were analyzed using excel (tables,
graphs and percentages) were used for a better understanding. According to the findings
of the study the researcher believes there is great importance of entrepreneurial skills to
the performance of women SMEs. The findings also reveals that while SMEs are
profitable, problems of access to capital and markets continuously undermine the
potentials to the growth of SMEs.

v
 TABLE OF CONTENTS

DECLARATION ................................................................................................................ ii

DEDICATION ................................................................................................................... iii

AKNOWLEDGEMENTS.................................................................................................. iv

ABSTRACT ........................................................................................................................ v

TABLE OF CONTENTS ................................................................................................... vi

LIST OF TABLES ............................................................................................................. ix

LIST OF ACRONYMNS AND ABBREVIATIONS........................................................ xi

DEFINITION OF KEY TERMS ..................................................................................... xiii

CHAPTER ONE: INTRODUCTION ................................................................................. 1

1.0 Introduction ................................................................................................................... 1

1.1 Background of the Study .............................................................................................. 1

1.2 Problem Statement ....................................................................................................... 4

1.3 Objectives of the study.................................................................................................. 5

1.3.1 General objective ....................................................................................................... 5

1.3.2 Specific Objective ...................................................................................................... 5

1.4 Research Questions ...................................................................................................... 6

1.5 Significance of the study.............................................................................................. 6

1.6 Limitations of the study ................................................................................................ 7

1.7 Scope of the study ......................................................................................................... 7

1.8 Organization of the Study ............................................................................................. 8

CHAPTER TWO: REVIEW OF RELATED LITERATURE............................................ 9

2.0 Introduction ................................................................................................................... 9

vi
2.1 Theoretical Literature.................................................................................................... 9

2.3 Critical Review and research Gap identification ........................................................ 24

2.4 Conceptual framework ................................................................................................ 27

2.5 Summary ..................................................................................................................... 29

CHAPTER THREE: RESEARCH METHODOLOGY ................................................... 30

3.0 Introduction ................................................................................................................. 30

3.1 Research Design.......................................................................................................... 30

3.2 Target Population ........................................................................................................ 31

3.3 Sample Design ........................................................................................................... 31

3.3.1 Sample size .............................................................................................................. 32

3.3.2 Sampling Technique ................................................................................................ 32

3.4 Data Collection Methods ........................................................................................... 33

3.4.1 Data Collection Instrument ...................................................................................... 33

3.4.2 Administration of data collection Instrument .......................................................... 34

3.4.3 Reliability and Validity ............................................................................................ 34

3.5 Data analysis Procedure .............................................................................................. 35

3.6 Ethical Considerations ................................................................................................ 35

CHAPTER FOUR: RESEARCH FINDINGS AND DISCUSSION ................................ 37

4.0 Introduction ................................................................................................................. 37

4.1 Demographic Characteristics of Respondents ............................................................ 37

4.2 Presentation of findings .............................................................................................. 41

4.2.1 Objective one: To examine the contribution of entrepreneurial skills on AGI trained

women owners of SMEs performance .............................................................................. 42

vii
4.2.2 Objective two: To assess the extent to which education/training have influenced

AGI trained women owners of SMEs performance. ......................................................... 48

4.2.3 Objective three: Challenges faced by AGI trained entrepreneurs to grow and ....... 51

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS. .... 57

5.0 Introduction ................................................................................................................. 57

5.1 Summary of the Findings ............................................................................................ 57

5.1.1 Objective One: To examine the contribution of entrepreneurial skills on AGI

trained women owners of SMEs performance. ................................................................. 59

5.1.2 To assess the extent to which education/training has influenced AGI trained women

owners of SMEs performance .......................................................................................... 60

5.1.3 Challenges faced by AGI trained entrepreneurs in the growth of their SMEs. ....... 60

5.2 Conclusions ................................................................................................................. 61

5.3 Recommendations ....................................................................................................... 63

5.4 Suggestions for further study ...................................................................................... 65

REFERENCES ................................................................................................................. 67

APPENDICES..................................................................................................................73

viii
 LIST OF TABLES

Table 4.1: Family Size ............................................................................................. 39

Table 4.2: Levels of education ................................................................................ 40

Table 4.4: Decision making skills ........................................................................... 44

Table 4.5: Management skills................................................................................. 47

Table 4.6: In your opinion what Levels of education would you recommend

entrepreneurs should possess? ................................................................................. 49

Table 4.7: Access to finance .................................................................................... 51

Table 4.8: Access to information to exploit business opportunities ........................ 52

Table 4.9: Access to necessary technologies ........................................................... 53

Table 4.10: Technology supports from TVET to SMEs ......................................... 56

ix
 LIST OF FIGURES

Figure 1.1: Entrepreneurship skills SMEs Performance model .............................. 28

Figure 1.2: Age distribution of respondents ............................................................ 38

Figure 1.3: Marital Status ........................................................................................ 39

Figure 1.4: Number of years in business. ................................................................ 41

Figure 1.5: Communication skills ........................................................................... 43

Figure 1.6: Marketing skills .................................................................................... 45

Figure 1.7: Financial management skills ................................................................. 46

Figure 1.8: To what extent is education/training important to SMEs performance. 48

Figure 1.9: How often would you recommend for training and development of

entrepreneurs skills .................................................................................................. 50

Figure 1.10: Access to necessary raw materials ...................................................... 54

Figure 1.11: Training and development from TVET to SMEs 2012 to 2014 june. 55

x
 LIST OF ACRONYMNS AND ABBREVIATIONS

AGI : Adolescent Girls Initiative

ANDFI: Association of Nigeria Development Financial Institution

BRCD: Babson-Rwanda Entrepreneurship Center.

EAC: East African Community

EDC: Education Development Center

FDI: Foreign Direct Investment

GDP: Gross Domestic Product

ILO: International Labor Organization

MIGEPROF: Ministry of Gender and Family Promotion.

MINECOFIN: Ministry of Finance and Economic Planning

MINEDUC: Ministry of Education

MINICOM: Ministry of Trade and Industry.

NISR: National Institute of Statistics for Rwanda.

OECD: Organization for Economic Cooperation and Development

PSF: Private sector federation.

SBA: Small Business Administration

SMEs: Small and Medium Enterprises.

TVET: Technical Vocational Education and Training

UN: United Nations

UNDESA: United Nations Department of Economic and Social Affairs.

UNDP: United Nations Development Program.

UNECE: United Nations Economic Commission for Europe.

xi
UNICEF: United Nations Children’s Fund.

UNIDO: United Nations Industrial Development Organization

UNIFEM: United Nations Development Fund for Women

WDA: Workforce Development Authority

WE: Women Entrepreneur.

xii
 DEFINITION OF KEY TERMS

Entrepreneur

An Entrepreneur is a person who organizes and manages a business under taking,

assuming the risk for the sake of profit. An Entrepreneur is a person who is willing to

help launch a new venture or enterprise and accept full responsibility for the outcome.

Entrepreneurship

This is a process of identifying and starting a new business venture, sourcing and

organizing the required resources, while taking both risks and rewards associated with the

venture. Entrepreneurship is the dynamic process of creating incremental wealth. This

wealth is created by individuals who assume the major risks in terms of equity, time

and/or career commitments of providing values for some product or service. The product

or service may or may not be new or unique but value must be infused by the

entrepreneur by securing and allocating the necessary skills and resources.

Entrepreneurship is the process of creating and building something of value from

practically nothing. That is, it is the process of creating or seizing an opportunity and

pursuing it regardless of the resources currently controlled.

Business

Business stems from the idea of being busy, and implies socially valuable and rewarding

work. An organization or Economic system where goods and services are exchanged for

one another or for money. A business is also known as an enterprise or firm, is an

organization involved in trade of goods, services or both to consumers. A business

owned by multiple individuals may be referred to as a company.

xiii
Small business

Small businesses are normally privately owned corporations, partnerships, or sole

proprietorships..

Small and Medium Enterprise

Individual and Firms managing a business enterprise established mainly for the purpose

of providing any service other than professional services.

A loan

A loan in terms of small business finance is a sum of money, advanced to a business that

must be repaid, at some point in the future. The loan is generally provided at a cost,

referred to as interest on the debt, which provides an incentive for the lender to engage in

the loan. In a legal loan, each of these obligations and restrictions is enforced by

contract, which can also place the borrower under additional restrictions known as loan

covenants.

Skill

Special ability in a task, especially ability acquired by training. The ability to do

something well arising from talent, training or practice.

Performance

The accomplishment of a given task, notable action achievement with accuracy,

completeness, cost and speed. For example annual review of performance can help

employees to confirm that they are on the right track for career development and are

completing their work productively and efficiently.

xiv
 CHAPTER ONE: INTRODUCTION

1.0 Introduction

This chapter is comprised of the background of the study, statement of the problem,

objectives of the study, research questions, and significance of the study. It also includes

limitations of the study, the scope and organization of the study. SMEs are the engine of

Rwanda’s economic growth. SMEs are the frequently the prime source of new jobs and

play a crucial role in income generation especially for the poor. 55% employ 1-5 report

by Rwanda development Board (RDB) 2010.

1.1 Background of the Study

Entrepreneurship is a process of bringing together creative and innovative ideas,

combining them with management and organization skills in order to combine people,

money and resources to meet an identified need and thereby create wealth. (Agomuo,

2002). Gibb (2005) defines Entrepreneurship as a way of thinking, reasoning and acting

that results in the creation, enhancement, realization, and renewal of value for an

individual, group, organization or society. Even though in Western countries Rwanda is

still mainly known for the devastating 1994 genocide in which around one million Tutsi

and moderate Hutu were killed, much has happened since then, and the Rwandan

government has been trying hard to eliminate the ethnic divides in the country, focusing

on a prosperous future with a shared Banyarwanda identity (Bijlsma 2009). In the

aftermath of the conflict and in light of demographic changes (women made up 70

1
percent of the population after the war due to the fact that more men were murdered,

imprisoned or in exile. The new government placed significant emphasis on the potential

of women as leaders for peace and development. (Hamilton 2000). As Abbott (2011)

explain, Rwanda has recognized the need to mainstream gender and promote women’s

educational, political and economic empowerment as part of its strategy for poverty

reduction. Nevertheless, Rwanda is said to still be a society characterized by a patriarchal

social structure in which men dominate women economically, socially, culturally and

politically (Ministry of Gender and Family Promotion (MIGEPROF 2010).

Economically, women are said to be less empowered in terms of independent

employment and access to financial services (Abbott et al. 2011). In addition, socially

constructed roles and responsibilities in the country are believed to account for

inequalities in terms of development opportunities and in the management and control

over economic resources (MIGEPROF 2010). In other words, while laws and institutions

play a major role in promoting gender equality and empowerment of women, complex,

deeply embedded and often taken for granted cultural attitudes seem to make it difficult

for legal and institutional reforms to be effective (Abbott et al. 2011).

Small and Medium Enterprises (SMEs) are the leading force in the development of

African economies. They are essential for economic growth in many developing

countries. Entrepreneurial activities such as innovation, risk bearing, employment

creation, finding new opportunities and the commercialization of their inventions have

contributed to the prosperity in all regions of the world (Ukaegbu, 2000). Women’s

productive activities, particularly in industry, empower them economically and enable

2
them to contribute more to overall development. Whether they are involved in small or

medium scale production activities or in the informal or formal sectors women’s

entrepreneurial activities are not only a means for economic survival but also have

positive social repercussions for the women themselves and their social environment

United Nations Industrial Development Organization (UNIDO, 2001).

SMEs are making significant contributions to Africa's economic growth. Ghanaian

micro-enterprises which employ less than 5 people, accounted for 70 percent of country's

workforce, World Bank, (2006). In 2003 Kenya's private sector employed 3.2 million

people and contributed 18 percent to the nation's GDP. Organization for Economic

Cooperation and Development (OECD, 2005). Despite women’s progressive

involvement in business ownership, evidence suggest that women owned businesses

under perform businesses owned by men in a number of performance measures and are

over represented in the sectors and activities that have a woman face (Stevenson and St

Onge, 2005). However, these activities have lower survival and growth rates because of

competition in their markets and hence lower earning potential (Coleman, 2007).In

Tanzania, many women have achieved financial and personal independence as they are

actively involved in working hard. Lack of financial resources and entrepreneurial skills

have not prevented them from starting up their businesses. All across Tanzania, women

entrepreneurs are proving that they have a driving business spirit and that they are part of

the solution to achieving economic growth and pulling people out of poverty

International Labor Organization (ILO, 2008). However, most women are engaged in

petty trade activities like informal food catering, vending, and beauty salons, roadside

3
trade, local brewing, vegetable selling and tailoring that are typical viewed as a women’s

activities (ILO, 2002). Roomi & Parrot, 2008 suggested that the Nigerian private sector

provides 50 percent of the country's employment and 50 percent of its industrial output.

Women are governed by rules imposed on them by a culture dominated by men. They do

not enjoy the same opportunities as men within the social academic and economic realms

of the country. Women are constrained in these areas due to the deep rooted

discriminatory socio-cultural values and traditions in the society.

1.2 Problem Statement

In its four year (2007-2010) strategic plan, Private sector federation (PSF) envisaged

enhancing entrepreneurship and business growth to Rwanda’s private sector. The survey

conducted by a consultancy called Wise Consults & Associates in (2010) aimed at

assessing SMEs existing capacities and gaps with a view to enhancing their

competitiveness in the domestic, regional & international markets. Among the key

business capacity parameters assessed were, lack of entrepreneurship skills which stands

at about 80 percent, lack of business planning which stands at about 85 percent, lack of

ICT usage which is close to 100 percent, lack of marketing skills at over 85 percent,

about 98 percent of businesses do not keep accounting records, and about the same

percentage do not also develop their products. Adolescent Girls Initiative (AGI) is a

project initiated and supported by World bank in collaboration with Ministry of gender

and family promotion (MIGEPROF) and Workforce development authority (WDA). It is

a project in its pilot stage in a period from 2012-2014 and its aim is to help adolescent

girls and young women make a successful transition from school to work. It trains Girls

4
entrepreneurial skills, occupational skills/technical skills such as Culinary, Food

processing/ Milk processing, Fruit and juice processing and hand craft through Technical

Vocational Education and Training (TVET). It also trains participants in

Entrepreneurship skills that include financial literacy, organization, leadership,

bookkeeping and accounting, business planning, finance and market assessment. It was

in this regard the researcher had to find out the contributions of these skills to the

performance of SMEs and the impact education and trainings made on their SMEs. The

researcher also had to find out the challenges faced by these young entrepreneurs in

growing and developing their enterprises.

1.3 Objectives of the study

1.3.1 General objective

The research examinined whether entrepreneurial skills can influence business

performance of SME’s. Specifically the study based on the AGI project trained women

at nyarugunga Technical vocatiotional and education training guided by the following

objectives.

1.3.2 Specific Objective

(i) To examine the contribution of entrepreneurial skills on AGI trained women owners

of SMEs performance.

(ii) To assess the extent to which education and training have influenced AGI trained

women owners of SMEs performance.

(iii) To examine the challenges faced by AGI trained entrepreneurs to grow and develop

their SMEs.
5
1.4 Research Questions

In order to achieve the above objectives, the study was guided by the following research

questions.

(i) To what extent has entrepreneurial skills contributed to AGI trained women owners
of SMEs performance?

(i) To what extent has education and training influenced AGI trained women owners of
SMEs performance?

(ii) What are the challenges faced by AGI trained entrepreneurs in growing and

developing their SMEs?

1.5 Significance of the study

The research will benefit the public in general as a referee and a source of knowledge

about entrepreneurship skills in growing businesses. To the Government, results from this

study hopefully will provide some helpful information to policy decision makers, in

creating an environment conducive to the development of entrepreneurship skills and the

private sector. To the academic world the research will be helpful to future researchers,

students in Mount Kenya University and other Institutions and Individuals interested in

the same subject of the study. To the researcher, the research will be based on in

fulfillment of the requirement for the award of a master’s degree in Business

Management and Administration, (Project Management option). This project will also

enable the researcher to attain more knowledge in entrepreneurship skills development

and growth of SMEs in Rwanda and elsewhere.

6
The findings of the study will be useful to entrepreneurs in SME’s since they will

highlight the focus on training that is adequate to improve effectiveness in managing

SME’s activities and implication to policy matters.

1.6 Limitations of the study

The researcher faced some challenges while doing this study. To begin with, the fact that

the majority of the respondents’ educational background is low created some negligence

and un willingness in filling the questionnaire. This was overcome by helping them

understand the questions, why such questions are asked and help them to fill or orient

them on how to fill the questionnaires. During the process of gathering information,

some respondents were reserved on some information. This was solved by explaining to

them the importance of the information to the performance of their enterprises. Despite

the reseacher’s efforts and a pproaches in explaining the potential benefit of the study to

them and their SMEs, the researcher was limited by the reluctance of some respondents

to complete the questionnaires promptly and those who failed to complete them at all.

This thus limited the number of respondents involved in the study.

1.7 Scope of the study

The study is about entrepreneurship skills and performance of SMEs. It involved an

analysis of women owners of SMEs that trained in Adolescent Girls Inintiative (AGI)

project (2012-2014). The study was conducted in Kigali city, the researcher targeted this

area because a large number of entrepreneurs who trained in Nyarugunga TVET operate

in cooperatives as advised. These are in Kicukiro district (Kigali city) in Gatenga and

7
Masaka. Some operate restaurants others are in hand craft and other related jobs. The

study covered particularly a group of 208 girls and young women that trained in

Adolescent Girls Initiative (AGI) Project. The researcher considered 136 respondents as

a sample size. Members train in Culinary, Food processing/Milk, Fruit, Juice processing

and Hand craft, in Nyarugunga Vocational Training Center, Gahaya links all in Kicukiro

District, Kigali City. The study considered the time period from 2012-2014, June. The

researcher chose this period because this is when this project started, and in a pilot stage.

1.8 Organization of the Study

The organisation of the study involved five chapters. Chapter one is mainly the

introduction of the study. Chapter two involves theoretical literature, empirical review,

critical review and research gap. It also involves conceptual franmework, and the

summary. Chapter three is all about the methodology that was used in the study, it

involves data collection instruments, sample design and size. This chapter also invoves

sampling technique, reliabilty and validity, data analysis procedure and ethical

consideration. Chapter four is about the summary and organisation of data according to

frequencies and percentages. Data was summarised and presented in tables to make more

sense. The researcher also used graphic presentation to enable the reader to see the trend

of distribution more easily than is possible by simply looking at numbers. Characteristics

of respondents, the presentation of findings, and objectives of the study. Chapter five

presents lntroduction and summary of the findings, objectives of the study, conclusions,

recommendations and suggestions for further study.

8
 CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.0 Introduction

This chapter provides the analysis of the existing literature written in areas of

entrepreneurship, by earlier scholars on women’s entrepreneurial skills, innovation,

resources and the growth of their businesses. It also analyses problems and factors

affecting the performance of women entrepreneurs in SMEs and supports given to SMEs.

2.1 Theoretical Literature

According to Cook and Nisxon (2000), interest in the role of (SMEs) in the development

process continues to be in the forefront of policy debates in developing countries. Owing

to the relevance of SME’s, in 2006 the government of Taiwan launched a $61 million

"branding" initiative, which is aimed to push the economy from being production-based

to knowledge-based.

The assumption in the growth literature is that business growth is the outcome of

managerial decisions and actions. The literature reveals a number of other theoretical

perspectives, which may also have a bearing on the size and/or growth issue. For

instance, some researchers have found that personal goals appear to have more

dominant influence than business goals when it comes to expansion or non-expansion of

Women Owned Businesses (WOBs) (Still and Timms, 2000). According to Naudé

(2011a), human development tends to adhere to a multidimensional concept of

development, of which economic development is a necessary, though not sufficient

9
requirement. So far economists have especially focused on the impact of entrepreneurship

on economic output, and not so much on human development.

Tikly and Barret (2009), identifies education as having an instrumental value in terms of

supporting livelihoods, generating income and reducing human insecurity, but also a

redistributive effect (for instance women’s education for closing the gender gap in

employment and income) and an empowering effect through contributing to realizing

democratic freedoms and enhanced social participation.

According to Lumpkin and Dess (2001), the concept of entrepreneurial orientation

consists of five dimensions, autonomy, innovativeness, risk taking, pro-activeness and

competitive aggressiveness. Autonomy is defined as an independent action by an

individual or a team aimed at bringing forth a business concept or a vision, and carrying

it through to completion. Innovativeness refers to the willingness to support creativity

and experimentation. Risk taking means a tendency to take bold actions such as venturing

into unknown new markets. Pro activeness is an opportunity-seeking and forward-

looking perspective. The fifth dimension, competitive aggressiveness, reflects the

intensity of a firm’s efforts to outperform the industry rivals (Lumpkin and Dess, 2001).

Okurut (2008) proposed that the returns in micro-enterprises are positively and

significantly influenced by education level, experience and business assets but negatively

influenced by being female-owned and rural-based. He argues that other than improving

the level of education, the improvement of rural infrastructure is very crucial in

enhancing the performance of rural-based micro-enterprises. Women may also fear or

10
face prejudice or sexual harassment, and may be restricted in their ability to travel to

make contacts United Nations Economic Commission for Europe (UNECE, 2004).

Women have limited access to vocational and technical training in South Asia. In fact,

women on average have less access to education than men, and technical and vocational

skills can only be developed on a strong foundation of basic primary and

secondary education. South Asia is characterized by low enrolment among women in

education, high dropout rates and poor quality of education. (UNECE, 2004).

Akintoye (2008) argues that accounting skill is necessary for successful entrepreneurial

and SMEs development. This is because the inability to install a proper accounting

system would disallow business monitoring, reporting, and performance evaluation that

are essential to the business survival. Small business has failed in the past for ignoring

this vital measurement apparatus. Accounting skills are the totality of skills ranging from

record keeping, attention directing, financial management and reporting skills that are

expected to promote effective decision, performance evaluation and business reporting of

any business enterprise (Akande, 2010). The effect of social structures work, family and

organized social life on women impact the women’s starting endowments of human and

social capital, access to resources and their perception of venture opportunity in business

start-up (Birley and Muzyka, 2000). Whether they are involved in small or medium scale

production activities, or in the informal or formal sectors, women’s entrepreneurial

activities are not only a means for economic survival but also have positive social

repercussion for the women themselves and their social environment. United Nations

Industrial Development Organization (UNIDO, 2001).

11
A later study by Kirubi (2006) suggests that modern energy such as access to electricity,

markets, roads, communication and school has contributed to the growth of micro-

enterprises in rural Kenya. A more recent study on the determinants of micro-enterprises

performance has been carried out by Schiebold (2011). He proposed a framework with,

socio-cultural environment, financing, petty trading and infrastructure.

Nchimbi and Chijoriga (2009) identified limited education and skills as a main

performance barrier at the micro level for women entrepreneurs in Ethiopia,

Tanzania and Zambia, and Cutura (2008) and Hamilton (2000) already concluded that

self-employed women across Rwanda are in need of management and technical

skills. These broad findings from earlier research have been specified as explicit

education needs throughout the interviews with women. First of all, women want to

improve their financial management and general business management skills in

terms of bookkeeping, marketing, customer care, human resource management and

business planning. Naudé (2010) explains that entrepreneurship drives structural change

and economic growth, thereby opening up further opportunities for more productive wage

employment, specialisation, and labour mobility, and allows people to escape from both

absolute and relative poverty and informality. As a result, national governments and

international organizations are beginning to focus on improving countries’ business and

investment environments resulting in more attention to the role of the private sector as an

important engine for economic growth and an emphasis on the role of government

planning (Acs and Virgill 2010). According to the Global Entrepreneurship Monitor in

2006, it is argued that "early stage entrepreneurial activity is generally higher in those

countries with lower levels of GDP due to the fact that many are pushed into

12
entrepreneurship because all other options for work are either absent or unsatisfactory

(necessity entrepreneurs) As for women, entrepreneurship is a gateway for women to

generate income so that a more sustainable livelihood can be achieved.

Younger entrepreneurs are looking for knowledge on business innovation practices and

self-employed women from the grassroots are missing market information, that young

women identify business innovation as a need is important, because in order for

entrepreneurship to contribute to economic development, as Rwanda aims at, a country

needs diverse and innovative enterprises (Acs and Virgill 2010; Naudé 2010). For

education programmes the topic of innovation might become more important over

time, because with entrepreneurship curricula being implemented in secondary and

tertiary education, skills in financial and business management will eventually face less

demand. Innovation, on the other hand, will continue to be relevant as it depends on

the business environment, market opportunities and industry specifics, which

continuously change. In addition, lacking access to information about the market

identified by grassroots women includes information about doing business, industry

specifics, taxation, training possibilities and financing opportunities. In an environment

where the government aims for entrepreneurs to be successful and contributing to

development processes, access to such information seems indispensible in order to

expand capabilities and set up sustainable and competitive businesses. Women

entrepreneurs in Ghana are very common but are predominantly in the informal

sector because they lack technological skills, internal and external support, as well

as absence of self-sustaining governmental intervention (De Groot, 2001). Besides, they

13
often lack managerial skills and support systems, have less education, and have a lower

financial literacy rates (De Geus, 2010). This affects the performance of female

entrepreneurs limiting them to the informal sector. The informal sector includes the

service and manufacturing sector such as having local restaurants, salons, bakery, dress

making, manufacturing of beads and local fabrics. Moreover, women start businesses

to avoid and eliminate gender, societal and generic imbalances because they

become more independent, “achieve job satisfaction, attain personal accomplishment

and become economically self-sufficient. De Geus ignored the fact that these women

entrepreneurs contributes a lot to economic growth and creation of employment.

According to Cook and Nisxon, (2000) poor management and accounting practices have

hampered the ability of smaller enterprises to raise finance. This is coupled with the fact

that small businesses are mostly owned by individuals whose personal lifestyle may have

far reaching effects on the operations and sustainability of such businesses. As a

consequence of the ownership structure, some of these businesses are unstable and may

not guarantee returns in the long run. Akintoye (2008) argues that accounting skill is

necessary for successful entrepreneurial and small business development. This is because

the inability to install a proper accounting system would disallow business monitoring,

reporting, and performance evaluation that are essential to the business survival. Small

business has failed in the past for ignoring this vital measurement apparatus. According

the United Nations Department of Economic and Social Affairs (UNDESA (2009) in

every society, women do most of the daily, routine household labor force participation.

Worldwide, who does the laundry, shopping, cooking, and child care, and looks after the

family’s needs and aging parents? In countries where water and fuel must be gathered

14
and families must grow much of their own food, who takes care of these tasks? The

answer is of course women.

According to the East African Community’s (EACs ) report on SMEs in Rwanda, (June-

2010), the vast majority of SMEs (93.07%) work in commerce and services. This is

followed by 1.86% in professional services, 1.66% in Arts & Crafts, 1.33% in industry,

0.94% in financial services, 0.7% in tourism and 0.45% in agriculture and livestock. This

heavy concentration in the commerce and services sector, with only 1.33% in industry,

reveals the need to address the challenges faced by SMEs, in order to build an economy

based on value added exports. Ministry of trade and Industry (2010) estimated that there

are over 72,000 SMEs operating in Rwanda, while only 25,000 of them are formally

registered. This study found most small enterprises in Rwanda start off as small

businesses and grew into big businesses or they are formed to supplement the income of

middle to upper income households. Rwandan small businesses comprise 97.8% of the

private sector and account for 36% of private sector employment. They often lack proper

accounting and financial systems. Rwandan medium sized enterprises, by contrast,

are well-established businesses that are individually or jointly owned. They have set

administrative processes, qualified personnel and trained staff, employ between 50-100

people and account for 0.22% of businesses in Rwanda, contributing 5% of total private

sector employment. Combining these categories shows that SMEs comprise

approximately 98% of the total businesses in Rwanda and account for 41% of all

private sector employment. According to Women for Women International report

(2009), it is said that women reinvest 90 percent of their income in their families and

15
communities compared to men who reinvest only 30 to 40 percent (World Bank).

Women are also more likely to use their profits to help the poor and are more likely to

hire other women to work for them. Grameen Bank also reports that women are highly

more likely to repay their loans than men.

Entrepreneurship is important for economic growth, productivity, innovation and

employment, and many countries have made entrepreneurship explicit policy priority.

Entrepreneurial activities have been recognized as an important element in organizational

and economic development, performance and wealth creation. According to World Bank

(2007) and Hisrich (2005) entrepreneurship has the following benefits. Entrepreneurs are

their own bosses, they make the decisions. They choose whom to do business with and

what work they will do. They decide what hours to work, as well as what to pay and

whether to take vacations. Entrepreneurship offers a greater possibility of achieving

significant financial rewards than working for someone else. It provides the ability to be

involved in the total operation of the business, from concept to design and creation,

from sales to business operations and customer response. It offers the prestige of

being the person in charge. It gives an individual the opportunity to build equity, which

can be kept, sold, or passed on to the next generation. Entrepreneurship creates an

opportunity for a person to make a contribution. Most new entrepreneurs help the local

economy, a few through their innovations contribute to society as a whole.

Entrepreneur ship is catalyst for economic change and growth. Entrepreneurship

increase per capita output and income. By doing so it involves initiating and constituting

change in the structure of business and society. As a result entrepreneurship contribute a

16
lot in increasing countries output and productivity. Entrepreneurship encourages

innovation and creativity. It develops new products or service for the market to fulfill

human needs. It also stimulates investment interest in the new ventures being created.

Entrepreneurship through its process of innovation creates new investment of new

ventures. More ventures being created, new jobs will be produced, thus reduce

unemployement rate, that creates and promotes wealth distribution.

According to Desai (2009) and Rogerson (2001), entrepreneurship is often credited with

many positive changes in developing countries, such as job and wealth creation,

innovation and related welfare effects. In addition, entrepreneurs can play a significant

and driving role in structural transformation of an economy from being predominantly

rural and agricultural based to being urban and manufacturing and service sector based

(Naudé 2010). According to Schorling, A. (2006), in Ethiopia the idea of Small

Enterprises development emerged as a promising agenda in the 1980s. A variety of

reasons have been cited for the surge of interest in SMEs development, like SMEs are a

better way for poverty reduction. SMEs are a platform for sustainable development and

productivity. SMEs are important actors within the trade sector and a platform for

economically empowering women and men. The SMEs sector plays an important role in

providing people with livelihood and income generating opportunities, providing income

and services to people who cannot get employment in the formal sector.

The Influence of Education and Training on the Performance of SMEs

SMEs play a vital role in poverty reduction, employment generation as well as economic

development in poor countries like Rwanda. The Rwandan micro and small enterprise

17
sector has a wide range of operators. Petty traders to small restaurant owners, a shoeshine

boy to a small shoe factory owner, a peddler on the streets to a grocery business operator,

etc. But to bring it to the modern arena, much is expected from the TVET institutions in

that they are the main suppliers of qualified labor force both male and female. In support

of this, to bring effectiveness in the SMEs sector by integrating them with TVET,

Ratchusanti (2008) identified the following-

Strengthening Partnership with the private and government organizations supporting

TVET projects. Existing the effective TVET projects of fostering entrepreneurship or self

employment of TVET students and the people. Establishing incubator training centers in

the colleges and enhancing the smart TVET students and the lacked chance people to

meet the capital investment loans to begin their businesses. Enhancing TVET students in

sufficient economic, moral, work habit, career attitude and SMEs concept by integrating

in teaching and learning. Toping up skills and knowledge for the people in the

community who has their own business by TVET colleges. Ratchusanti added that SME

sustainable development should be an integral aspect of TVET plans, projects activities

in teaching and learning process. However, administration, teachers are the key for

success. There need to be managers facilitators coaches, mentors, advisors, counselors,

or anyone who are to make TVET students continue to learn, to improve their knowledge

skills and attitude in SMEs which effect economic development of the country.

Challenges faced by SMEs

Even though women entrepreneurs in SMEs contribute a lot for the economic

development of a country, there are a number of challenges that affect them associated

18
with different factors. For example, according to World Bank (2005), International Labor

Oorganisation (ILO) (2003), women entrepreneurs in SMEs are affected by lack of

entrepreneurial, managerial and marketing skills, bureaucracy, lack of accessibility to

information and knowledge. Difficulties accessing financial resources/ lack of capital,

lack of accessibility to investment, technology equipment and know how, non conformity

of standardization, lack of quality awareness and lack of mutual recognition schemes.

Product and service range and usage differences, language barriers and cultural

differences, risks in selling.

Access to finance is a key issue for women, accessing credit, particularly for starting an

enterprise, is one of the major constraints faced by women entrepreneurs. Women often

have fewer opportunities than men to gain access to credit for various reasons, including

lack of collateral, an unwillingness to accept household assets as collateral and negative

perceptions of female entrepreneurs by loan officers (Mahbub, 2000).

Conventional Wisdom says that four out of five businesses (80 percent) fail in their first

five years, and the Small Business Association (SBA) reports a 62 percent death rate

within six years. Although the chances of business survival may be greater than some

used to think, keep in mind that even the most optimistic, interpretation of the statistics

shows that nearly one out of five businesses that cease operations it is left owing money

to creditors. Many factors have been identified as to the possible causes or contributing

factors to the premature death. Key among this include insufficient capital, lack of focus,

inadequate market research, over-concentration on one or two markets for finished

products, lack of succession plan, inexperience, lack of proper book keeping, lack of

proper records or lack of any records at all, inability to separate business and family or

19
personal finances, lack of business strategy, inability to distinguish between revenue and

profit, inability to procure the right plant and machinery, inability to engage or employ

the right caliber staff, plan-lessens, cut-throat competition, lack of official patronage of

locally produced goods and services, dumping of foreign goods and over-concentration of

decision making on one (key) person, usually the owner or welfare gains.

Women and programmers staff in Kigali also identified cultural and social barriers as the

main challenge for women entrepreneurs, though PSF (2009) did not recognize this

challenge. Gender relations is one of these barriers, and indicates how Rwandan men and

women are still under the impression that it is the man who has to provide economically,

while the woman is expected to perform other tasks mainly related to the household,

women entrepreneurs recognized a traditional banking sector preventing women from

accessing finance, because their SMEs activities are generally underestimated and

women alone cannot provide the collaterals being asked in return of loans. These

challenges suggest the presence of un justices, not just economically and socially, but

also politically because women have less voice and are not always expected to decide

about their redistribution and recognition. In addition, these barriers prevent women

from expanding their capabilities. They have the wish to achieve the functioning of

entrepreneurship. In other words, even though impacts have been recognized to

contribute to national development, social change and personal empowerment, just as

policies and strategies are aiming for, a gap seems to exist between discourse and practice

in which not all women entrepreneurs are yet able to participate on par with their male

counterparts. This means impacts can be increased if the reasons for these barriers can be

understood and addressed, which Acs et al. (2011) found to possibly lead to major

20
welfare gains and experience in on how to participate in the market place and are

therefore unable to market goods and services strategically. Thus, women-owned SMEs

are often unable to take on both the production and marketing of their goods. In addition,

they have often not been exposed to the international market, and therefore lack

Knowledge about what is internationally acceptable. The high cost of developing new

business contacts and relationships in a new country or market is a big deterrent and

obstacle for many SMEs, in particular women-owned businesses.

Access to networks

Women have fewer business contacts, less knowledge of how to deal with the

governmental bureaucracy and less bargaining power, all of which further limit

their growth. Since most women entrepreneurs operate on a small scale, and are

generally not members of professional organizations or part of other networks, they

often find it difficult to access information. Most existing networks are male

dominated and sometimes not particularly welcoming to women but prefer to be

exclusive. Even when a woman does venture into these networks, her task is often

difficult because most network activities take place after regular working hours. There

are hardly any women-only or women-majority networks where a woman could enter,

gain confidence and move further. Lack of networks also deprives women of awareness

and exposure to good role models. Few women are invited to join trade missions or

delegations, due to the combined invisibility of women-dominated sectors or sub sectors

and of women as individuals within any given sector (Mahbub, 2000).

21
2.2 Emprical Literature

The 10,000 Women Project is a Goldman Sachs initiative launched in 2008, constituting

a $100 million commitment to training women globally. The program supports initiatives

in 40 countries and includes 80 partners. Currently, 7,000 women have benefited from

program’s activities and 10,000 were expected to benefit by the end of 2013. In Rwanda,

the 10,000 Women program is implemented by the Rwandan government and the School

of Finance and Banking, and is overseen by the University of Michigan. To date five

cohorts of about 30 women each have been trained in Rwanda. The target beneficiaries

are growth-oriented female business owners who can demonstrate financial need to

attend a business-based educational program. The training package consists of nine

modules that cover a range of business development topics such as public relations,

marketing, management, human resources, negotiations, business plans, and customer

care, in addition to other topics. These topics are taught over a six-month period, with

training two to four days per week. The program in Rwanda also includes a business

plan competition for which the top five award winners receive a $1,000 prize. This

competition is meant to make the program more competitive and motivate participants

further. Local and international organizations identify trainees, along with financial

institutions. Trainees are able to request post-graduation services, which can include

further training on the loan process, mentoring and gender sensitization training for

husbands to see the need for women to be able to use property as collateral.

In 2003 the Chair in entrepreneurship at the University of Pretoria conducted a study on

174 women entrepreneurs in South Africa for a major bank. This was done to address on

22
some of the barriers women face. The study focused on perceptions that women

entrepreneurs had a bout financial Institutions and lack of access to financial assistance.

An important research finding was that 68% of the women entrepreneurs stated they

would like to receive some entrepreneurial training and education from the commercial

Banks. (Van der Merwe & Nieman, 2003, 35). Further results highlighted that women

require training and advice on specific areas such as compiling a business plan,

advertising, entrepreneurial skills training, financial and cash-flow planning

empowerment and enrichment opportunities for women, networking opportunities.

Relationship build program, including mentoring, counseling and advice on managing a

business, risk management and taxation issues.

The SMEs sector plays a pivotal role in creating innovation, wealth, employment and

economic growth in industrialized and developing countries (Robson and Bennet, 2000)

For example in UK, SMEs account for 99.8 percent of enterprises and 52.4 percent of

employment (Small business service, 2008). The encouragement of entrepreneurial

behavior is therefore critical for the economy (Gray, 2006). Especially given its

contribution to economic prosperity within knowledge-based economies (Hannon, 2005).

Harrison and Leitch (2010), have noted that researchers, governments, and policy makers

are recognizing the significant role that the education sector in particular must play in

economic development. The need for more entrepreneurship in particular has been noted

as important.

23
2.3 Critical Review and research Gap identification

The 10,000 Women Project is a Goldman Sachs initiative launched in 2008, constituting

a $100 million commitment to training women globally. The program supports initiatives

in 40 countries and includes 80 partners. Currently, 7,000 women have benefited from

program’s activities and 10,000 were expected to benefit by the end of 2013. In Rwanda,

the 10,000 Women program is implemented by the Rwandan government and the School

of Finance and Banking, and is overseen by the University of Michigan.

Though the Goldman Sachs initiative in entrepreneurship training was done in such a

way that most of the skills were trained the fact is clear that there is still a problem in

Information technology and business planning in almost all SMEs. There is still a big

problem of identifying opportunities in order to improve and grow SMEs. by

entrepreneurs, therefore more emphasis should be considered concerning some of these

skills.

An important research finding was that 68% of the women entrepreneurs stated they

would like to receive some entrepreneurial training and education from the commercial

Banks. (Van der Merwe & Nieman, 2003, 35). Further results highlighted that women

require training and advice on specific areas such as compiling a business plan,

advertising, entrepreneurial skills training, financial and cash-flow planning

empowerment and enrichment opportunities for women, networking opportunities.

Relationship build program, including mentoring, counseling and advice on managing a

business, risk management and taxation issues. Despite all the skills highlighted by Van

der Merwe & Nieman, 2003 but they did not consider that entrepreneurs should as well

have access to information so as to grow their SMEs for a better performance.

24
Robson and Bennet, (2000) Indicates that SMEs sector plays a pivotal role in creating

innovation, wealth, employment and economic growth in industrialized and developing

countries For example in UK, SMEs account for 99.8 percent of enterprises and 52.4

percent of employment Small business service, (2008). The encouragement of

entrepreneurial behavior is therefore critical for the growth of economy (Gray, 2006).

Especially given its contribution to economic prosperity within knowledge-based

economies (Hannon, 2005). Harrison and Leitch (2010), have noted that researchers,

governments, and policy makers are recognizing the significant role that the education

sector in particular must play in economic development. The need for more

entrepreneurship in particular has been noted as important. All these agrees on how

SMEs are important to economic growth in all economies and they talk about

entrepreneurial behavior being critical for the growth of economy, but they forgot that

most of the entrepreneurs lack skills in various areas like management, marketing, among

others.

According the United Nations Department of Economic and Social Affairs (UNDESA

(2009) in every society, women do most of the daily, routine household labor force

participation. Worldwide, who does the laundry, shopping, cooking, and child care, and

looks after the family’s needs and aging parents? In countries where water and fuel must

be gathered and families must grow much of their own food, who takes care of these

tasks? The answer is of course women. Here UN DESA thought that women only

lacked time to do the work, and ignored that they should also be equipped with

knowledge on how to identify opportunities as well as networking in order to manage

their SMEs. to growth and sustainability.

25
After reviewing and criticizing the work of various reserchers, scholars, reports and their

critical contributions to entrepreneurship performance, the researcher identified a

business plan as a gap. Many talked about business planing but according to the findings

there still a lot to learn on business planning. A business plan is very critical in guiding

the growth and development of enterprises.

A business plan describes all the steps necessary for opening and operating a successful

business. A business plan shows a general picture of the business. It describes what your

business will produce, how you will produce it and who will buy your product or service.

A business plan explains who will run your business, how it will be run and who will

supply it with goods. It states how your business will win over customers from

competitors, and what your business will do to keep customers. A business plan provides

detailed financial information that shows how your business will succeed in earning a

profit both in short and long term. It actually explains all the above mentioned skill and

how they will be utilized efficiently. A business plan may help you secure financing for

your business. You may have a great idea, but very little capital to invest in your

business. You may need to go to a bank to obtain a loan or find other investors for your

startup money. Lenders and investors require a business plan before they will consider

financing a business. A well written business plan shows lenders and investors that you

are serious about your business idea and have spent sufficient time in the planning

process. The loan officer at your bank or an investor should be impressed with the work

that you put into your business plan. A business plan serves as a tool for managing your

business once your business is up and running, you can use your business plan in your

26
decision making. It designs the vision of how your business would grow over time, by

following the strategies.

2.4 Conceptual framework

A conceptual framework is a scheme of concepts or variables that underlie the study and

the relationship among these various variables. It is a model of how one makes logical

senses of relationships among factors that have been identified as important to the

problem. A conceptual framework is the basis of ones research problem, it is the basis of

what we do and a bout what it means, influenced by the ideas and research of others. It

may be an overview of ideas and practices that shape the way something is being done.

The conceptual framework is the one that is used to decide the analysis of the evolution

of the research problem and it is the one that appear to explain it. The conceptual

framework can be stated as independent variables being the factor which is measured,

manipulated or selected to determine its effect on the dependent variables which is the

factor that is observed and measured to determine the effect of the independent variable

on it. It should clearly show contribution to knowledge and practical use to the society.

27
Figure 1.1: Entrepreneurship skills SMEs Performance model

Independent Variables Dependent Variables

Entrepreneurial skills
Performance of SMEs
-Managerial skills
-performance and turnover.
-Technical skills
-Increase in sales.
-Sales and marketing skills
-Increase in profits.
Intervening
-Finance Variables
and accounting skills
-Business growth
-Business planning
-Improved welfare

Intervening Variables

-Trainings/development
-Favorable Government
policies.
-Self motivation
-Integrity/honest

Source: Researcher 2014

An independent variable is a presumed cause of an effect, while a dependent variable is

the presumed effect. Therefore analyzing the variables, entrepreneur ship skills contribute

to the performance of SMEs in that managerial skills, technical skills, sales and

marketing skills, finance and accounting skills and business planning contribut to high

performance, employee turnover rate, increase in sales, increase in profits, business

growth. A business plan directs an entrepreneur in managing both long and short term

projects and this influences business growth and expansion. Intervening variables like

28
government policies, training and development and self motivation of entrepreneurs will

surface between the time the independent variables start operating to further influence the

dependent variables to make an impact in business performance.

2.5 Summary

Chapter two presented the literature review of various authors, it reviewed various

authors who have made contribution on entrepreneurial skills and SMEs performance.

The chapter explained empirical studies which have already been done in the world

including related studies made in African countries including Rwanda. It critically

reviewed the theories and the findings show lack of entrepreneurial skills. Most SMEs

lack management skills not only in change management but also in new skills such as

limited capacity in marketing, strategy and most of them operate without a business plan

which would guide the business all the time. Workers shortcomings in knowledge and

education were also found to be significant. SMEs have been recognised as the main

contributor of economic growth by governments including our government and therefore

development of SMEs is being given a priority all over the world including Rwanda.

Even in developed countries SMEs contribute a lot to the economy however, Small

Business Association (SBA) reports on SMEs performance that 62 percent death rate in

within six years and this is due to insufficient capital, lack of focus, inadequate market

research, lack of business strategy. There is also inability to separate business and

family or personal finances, inability to distinguish between revenue and profit and

inability to engage the right caliber staff.

29
 CHAPTER THREE: RESEARCH METHODOLOGY

3.0 Introduction

In this chapter the research explains the methods and techniques the researcher used in

data gathering, methods and tools, sampling and sampling procedures. The methods of

data analysis were discussed very well, as well as the reliability and validity of the

research instruments.

3.1 Research Design

Research design or methodology is a plan of the proposed research work, it is the plan,

structure and strategy of investigation conceived so as to obtain answers to research

questions. A research design is a device for bringing to light new knowledge. Survey

design was employed in the study to assess the key factors that affect the performance of

SMEs. This was chosen because it is an efficient way of collecting descriptive data

where the most common intruments used for collecting information are interviews and

questionnaires. In a survey design the emphasis is the frequency or the number of

answers to the same question by different people. Survey design helps to gather well

organised information on a particular problem as well as measuring the characteristics of

a large population. Survey design involves a researcher come into direct contact with

people in the study, and in this way new facts of life can be gathered and it also throws

useful insights on different social problems.

30
3.2 Target Population

According to Lim and Ting (2009), a population is a complete group that shares a

common set of characteristics. It may also refer to an entire group of individuals, events

or objects having a common observable characteristics. Thus the study population

consists of 208 entrepreneurs as a target population, who trained in this project,

(Adolescent Girls Initiative AGI), also known as “The Economic Empowerment of

Adolescent Girls and young women” from 2012-2014. Members are in cooperatives

doing handcraft, others are in restaurant businesses. For selecting these samples of

entrepreneurs, simple random sampling was used in which the 3 key sectors that woman

entrepreneurs are engaged were taken as strata so as to give equal chance of participation

to each of the sectors.

3.3 Sample Design

According to Kothari (2009), a sample is a small group of cases drawn from a population

and used to represent some larger group, it is a subset from the population that is

investigated, and whose characteristics will be generalised to the whole population. The

researcher used probability sampling where simple random sampling was applied in order

to select a reasonable number subjects that represents the target population. It provides

accurate information about groups that are too large to study in its entity. Simple random

sampling also avoids bias where every sample of a given size has an equal probability of

being selected. The researcher chose this sampling design because it is less time

consuming, less costly and it is the most practical method of data collection.

31
3.3.1 Sample size

A sample is a small group obtained from the accessible population, it is a subset of the

population and each member or case in the sample is referred to as subject. The sample

size was derived from a population of 208 both girls and women entrepreneurs where

136 respondents were taken as a sample size. Morgan’s formula at a confidence interval

of 95% and a margin error of 0.05, was used to obtain 136 respondents from a total

population of 208 and this is shown below.

Where n is the minimum sample size

N is the population from which the sample was drawn estimated at 208

e is the margin of error estimated at 0.05

Substituting in the above formula to determine the sample size.

3.3.2 Sampling Technique

The researcher used a simple random sampling, this is a subset of a statistical population

in which each member of the subset has an equal probability of being chosen. A simple

random sample is meant to be an un biased representation of a group.

32
3.4 Data Collection Methods

The information were collected by the use of structured and unstructured questionnaires

given to the respondents. The researcher was involved in data collection by guiding the

respondents on how to answer the questions. Unstructured or open-ended give

respondents complet freedom of response. The space provided sometimes is an indicator

of the length of the answer expected. Primary data was collected where the researcher

directly interviewed the respondents. Interviews were also conducted face to face with

SMEs heads, TVET heads. The secondary data included information that were obtained

mainly from training centers, different reports, publications, Journals, websites and

literatures, which are relevant to the theme of the study, gathered from various sources.

3.4.1 Data Collection Instrument

Questionnaires both structured and unstructured were used by the researcher in the

process of data collection, and Likert response scale was also applied well designed for

the study. The researcher chose questionnaires because they are less expensive,

convinient, saves time and are less biased where the the interviwer usually is not

phyisically present and can not influence the respondents. Questionnaires also creates

anonymity which enables respondents to express their opinions freely even to sensitive

and personal questions. The researcher carried out interviews with the heads of SMEs

and TVET. The reseacher applied scheduled-structured interview. This method is based

on an established questionnaire, that is a set of questions with fixed wording and

sequence presentation with indications on how to answer the questions.

33
3.4.2 Administration of data collection Instrument

The reseacher applied self-administered questionnaires, where the researcher distributed

all questionnaires to respondents and collected all compiled responses. The

questionnaires were prepared in a closed-ended format to give respondents a list of

possible alternatives and open-ended to allow respondents complete freedom of response.

The first part covered the demographic profile and the characteristics of women

entrepreneurs in SMEs, the second part covered interviews with SME Heads, the third

covered interview questionnaires with SMEs and TVET leaders. All addresses issues of

key factors that affect women entrepreneurs. The Likert scale ranges from ‘strongly

agree’ to ‘strongly disagree’ (5=strongly agree 4=agree 3=un decided 2=disagree

1=strongly disagree) so as not to limit the response of respondents to some limited

ranges.

3.4.3 Reliability and Validity

Reliability refers to the extent to which a research instrument yields measures that are

consistent each time it is administered to the same individuals. Here the researcher used

test-retest method where the research instrument was administered to the same group of

people at two different times and the respondents gives the same answer to the same

question if the circumstances have not changed. Validity refers to the extent to which a

research instrument measures what it is designed to measure. Validity has to do with

how accurately the data obtained in the study represents variables of the study. The

questionnaires were given to various respondents through the support of the

34
administration at the suggested convenient time. In this study the researcher put special

attention in analyzing the information objectively. The researcher considered various

sources like the journals, books, reports and other publications which allowed the

researcher to gather relevant data for this study. Source triangulation was utilised by

comparing information which was given by the source at different times in different

situations.

3.5 Data analysis Procedure

Questionnaires related to the objectives were given and their respective responses were

fully analyzed and interviews carried out. At the end data collected were coded and

reviewed by the researcher so as to have the required quality, accuracy, consistency.

Editing was done to collect any mistakes made during the field study, monitor the

accuracy to find out whether the standard required was achieved. Coding was done to

summarize data by classifying different responses to be understandable. Tabulation is the

putting together of data into a simplified way as in tables. Tabulation process involved

putting data into statistical tables and while determining the frequencies of the responses

for every variable and graphs for a better understanding.

3.6 Ethical Considerations

Throughout the process of data collection participants were persuaded to co-operate, and

give objective and honest answers. The researcher assured the respondents that

information given will be kept confidential and no one else will have direct access to the

information and that it was just for academic purposes.

35
The researcher also had to seek informed consent especially for private information

concerning individuals and ensuring annonymity especially for sensitive information and

this helps to avoid biased responses. The resarcher told the respondents that those who

wished not to write their names on questionnaires, were free not to do so. This gave

respondents freedom to answer honestly feeling secure that no one will know they were

the source of a particular information.

36
 CHAPTER FOUR: RESEARCH FINDINGS AND DISCUSSION

4.0 Introduction

This chapter presents and analyses the data, interpretation, discussion and findings of the

study. Information collected from respondents in relation to Entrepreneurship skills

training and SMEs are reported in this chapter. The study comprised both qualitative

and quantitative approaches for analyzing and presenting the findings. Quantitatively

refers to numerical numbers presentations and Qualitative refers to words. This was done

to simplify the discussion and interpretation of the information collected for the study.

The researcher provided a total of 136 questionnaires to respondents who have finished

the training in culinary, food processing, fruit/milk processing and handcraft in AGI

project at nyarugunga TVET and Gahaya links. Respondents formed cooperatives and

their SMEs are in handcraft and restaurant respectively since they have no equipment to

start processing production. Questionnaires were also given to the heads of SMEs and

TVET. The researcher was able to collect 98 (72%) responses since all 136 respondents

that were taken as a sample size could not return the questionnaires as expected. The

study based on the objectives of the study. Data were collected and discussed through

three research questions. Generally, all the questions focused on Entrepreneurship skills

and performance of SMEs. owned by women trained in AGI project.

4.1 Demographic Characteristics of Respondents

General information like demographic questions such as age, marital status, education

were asked. This gives a general picture of the trainees in AGI project where women

were trained in entrepreneurship skills. This information was to enable the researcher
37
judge the responses given in order to successfully complete the study. Age distribution

describes the characteristics of respondents, according to respondents who trained in

AGI project the majority comprised of 16-20 years old as demonstrated in figure 1.2.

Figure 1.2: Age distribution of respondents

Below 20 years
21-30 years
31-40 years
100
80
60 31-40 years
40
21-30 years
20
Below 20 years
0
Frequency Percent

Source: Researcher

Basing on the 98 respondents, the researcher identified that the majority of the

Entrepreneurs were of the age group 16-20. This accounted for (87%) whereby those

above 21 were only (12%). Only one was above 31 years (1.0%), as indicated in figure

This is so becauses AGI project has age limit of 16-24 to those who trains in this project.

This project is to empower adolecent girls and young women who were unable to

continue to higher levels of education with entrepreneurial skills and be able to start and

grow their SMEs. be self sustainable and also contribute to economic growth and the

society.

38
 Figure 1.3: Marital Status

60
50
40 Married
Single
30
Divorced
20
Widowed
10
0
Frequency Percent

Source: Researcher

Figure 1.3 clearly shows that 22% (22) respondents married at an early age immediately

after dropping out of school. 57% (56) are still single, (12) with 12% are divorcees.

According to respondents those married at an early age just did it as a last option for

survival. 57% that managed to stay single are those who were doing petty jobs as house

maids. These confessed they did not like their jobs and were blessed to be trained with

skills and be able to quit these jobs. 12% divocees, did not get what they expected from

the marriage and after all they say they were not lawfully married. This indicates that at

such early age one is unable to make a proper decision for life and stay focused.

Table 4.1: Family Size

Frequency Percent
No children 64 65.0

Less than 3 22 22.4

3-5 children 12 12.2

Total 98 100

Source: Researcher

39
Table 4.1 shows the family size at 65% with no children, these have not married yet most

of them are primary level drop outs. 22.4% have less than 3 children and those of 3-5

family size makes up to 12.2%. Considering that the big percentage that was not married

is because they were under age though they had droped out of school. The 12.2% of the

respondents that were married, the researcher also found out that they started family life

at an early age. This is because they left school at an early age and probably did not get

anything to do immediately they left school and had no other choice. Others are ophans

without families to care for them and they were corrupted into marriages that did not

even last for long abandoned with their kids.

Table 4.2: Levels of education

Frequency Percent
Primary level 72 73.4

Secondary level 14 14.2

Tertiary level 12 12.2

Total 98 100

Source: Researcher

From table 4.2 findings shows a big number of primary education at 72, (73.4%),

secondary level is only 14 respondents at (14.2%) these also did not go up to advanced

level. Tertiary level counts up to 12 respondents at (12.2%). This shows low levels

levels of education and this contributes to low levels of understanding as trainees trainees

tr in entrepreneurial skills to be able to start and grow their enterprises. Trainers also say

this is not that easy because they need to translate for the trainees as they train them so
40
that they may benefit fully from the training delivered so that they may be able to start

and grow their SMEs.

Figure 1.4: Number of years in business.

Source: Researcher

Figure 1. 4. shows all respondent at 100% having been in business for one year. This is

so because respondents are all from AGI project which is in its pilot stage so all

respondents’ businesses are still new. Started last year and are in handcraft business and

in a restaurant businesse (100%). Trainees train for 6 months and have internship for

about 6 months as they gain experience in trained fields before they start their businesses.

The project also started mid 2012 and the first trainees started lat last year which also

justifies all of them having been in business for just one year.

4.2 Presentation of findings

To make the findings much beter understood by all, the researcher presented the findings

in both tables and graphs. This was so because some people prefer numbers as presented

in tables while others prefer seeing things in in graphic presentation to be able to l dentify
41
the trend of distribution more easily. However others would prefer having both for a

better understanding and comparison, but they all present the same findings and give

same meanings but in different ways. Presentation of findings was according to research

objectives.

4.2.1 Objective one: To examine the contribution of entrepreneurial skills on AGI

trained women owners of SMEs performance

The findings are based on SME’s whose owners went through training in

entrepreneurship skills, at Nyarugunga TVET. (Kicukiro district). Basing on the research

questions addressed in this study, the findings show that SME’s owned by members

trained in AGI project were working and operating on a small scale in terms of

firm/structure characteristics. Though members lack capital and equipment they are able

to run and manage their SMEs helped by the use of the skills they attained from the

training as discussed. Members trained in marketing skills, accounting skills, Human

resource skills, communication skills, decision making skills, financial management

skills, business plan to mention a few.

Table 4.3 What Sector is your business engaged in?

Frequency Percent

Production 54 55

Services 20 20.4

Trade 24 24.4

Total 98 100

Source: Researcher

42
From table 4.3 The findings show 55% (54) respondents are engaged in production of

food, milk, fruit and juice processing. 20.4% (20) respondents are engaged in services

where they are trained in culinary, while 24.4% (24) are trained in handcraft. Most of

these completed six months of training and six months mentorship stage and are in

cooperatives doing hand craft. Others are in restaurants business, there is no processing

because of lack of equipment.

Figure 1.5 shows the importance of communication skills in the performance of SMEs.

Communication is very crucial in any situation and the performance of a business, when

communication goes wrong, it affects the end results and the feedback. We need to

communicate in any aspect of transaction in business. A lot of mistakes and errors may

originate from communication if it is not done with care and effectively. There fore

communication skills are needed by entrepreneurs for better performance of enterprises.

Figure 1.5: Communication skills

70
60 Extremely
important
50
40
Very important

30
Moderately
20 important
10
Slightly important
0
Frequency Percent

Source: Researcher

43
Figure 1.5 clearly shows that the majority of the respondents 60 (61.1%) admitted that

having communication skills was extremely important to effectively communicate with

their clients. 27 (27.5%) find communication skills very important, while 8 (8.1%)

viewed communication skills as moderately important, although just 3 (3.0%) could not

see it as an important factor for running their business effectively. Regardless of the size

of your business, whether it's a large business, a small business they need good

communication skills since they interact with all sorts of people as well as managing

networking and having the feedback.

Table 4.4 indicates the importance of decision making skills in the performance of SMEs.

Considering decision making in any situation is an important tool, you may have a good

idea and the decisions you take on that idea will determine whether things are likely to

be as expected. Many times we take decisions that we regreat when it is too rate to save

the situation or rectify the situation. Entrepreneurs need to have decision making skills

for better performance of SMEs. as indicated in table 4.4.

Table 4.4: Decision making skills

Frequency Percent

Extremely important 62 63.2

Moderately important 6 6.1

Slightly important 2 2.0

Very Important 28 28.5

Total 98 100

Source: Researcher

44
From table 4.4 respondents agree that good decision making skills is the foundation for

life and management. 62 (63.2) extremely agree that decision making skills influences the

performance of a business. 6 (6.1) views say it is moderately important, 2 (2%) don’t

think it is that important while 28 (28.5%) view decision making skills as very important

to business performance. Decision making is very important, you may have a good

business idea, but if you make poor decisions then you will be a failure as you

implement wrong decisions which will mislead you as you startup and grow your SME.

Figure 1.6: Marketing skills

70

60 Extremely important
50

40
Moderately important
30
Slightly important
20

10 Very Important
0

Frequency Percent

Source: Researcher

Basing on the findings of the study figure 1.6 revealed that marketing skills are important

for the SME’s performance. Respondents indicate that 65 (66.3%) agreed that it was

extremely important, 4 (4%) as moderately important, 2 (2%) as slightly important and

27 (27.5%) as very important. Marketing is the process that determines what products or

services customers need, and the strategy to use in sales, communications and supply as

most businesses operate in a very high competitive atmosphere where things change
45
rapidly. It is through marketing that your products will be known and promoted in order

to grow your business.

Figure 1.7 is about financial management, This is very crucial when starting any

business, and when you need to grow and expand your business. Investors need to know

how you will manage your finances if they are ti invest in your business. Financial

institutions as well as lenders will be interested in your financial management in order to

finance your business. Entrepreneurs therefore need skills in financial management to be

able to manage their businesses for a better performance both in short and long terms.

Figure 1.7: Financial management skills

Source: Researcher

Findings of the study are as shown in figure 1.7 where 64 (65.3) find financial

management skills as extremely important, 4 (4) say it is moderately important. 3 (3%)

see it as a slightly important factor, where as 27 (27.5%) find it a very important factor in

46
influencing the performance of a business. This is very important and most SMEs are

striving to achieve this objective. You need to differetiate revenues from profits and

personal finances and your business in order to grow and expand your business.

Figure 1.7 discusses how management skills can influence the performance of SMEs. It is

through management that entrepreneurs maintain loyalty with employees, through

management you motivate, evaluate the employees, appraisal and manage employee

turnover rate.

Table 4.5: Management skills

Frequency Percent

Extremely important 54 55

Moderately important 4 4.0

Slightly important 3 3.0

Very Important 37 37.7

Total 98 100

Source: Researcher

Findings from the study indicate the need of management skills as important as indicated

by the respondents. For the success of the SME’s. 54 (55%) responded as extremely

important, 4 (4%) as moderately important, 3 (3%), as slightly important, 37 (37.7%) as

very important respectively as shown in table 4.5. SME’s owners indicate that

management skills proved to be important to their SMEs performance. Through

managent skills you will be able to attain or upgrade employee skills through training and

47
development. Therefore entrepreneurship skills contribute a lot to the growth of SMEs in

all aspects by utilising all the skills needed efficiently and effectively to the performance

of SMEs.

4.2.2 Objective two: To assess the extent to which education/training have

influenced AGI trained women owners of SMEs performance.

Entrepreneur ship education is the teaching od knowledge and skills that will enable the
student to plan, start and run a business. Knowledge and skills are prerequisite in every
entreprenerial venture. Basing on the objective to what extent does education and
training enhance the SMEs, performance, the findings of the study indicate that it is
evident that the success of the training depends on the level of education of the
entrepreneurs. Findings show levels of education at 73.4% of all respondents trained in
AGI project at primary level which is very low and may create a barrier the SMEs
performance.

Figure 1.8: To what extent is education/training important to SMEs performance.

extremely important

Moderately important
80
70 Slightly important
60
50 Very important
40
30 Very important
20 Moderately important
10
Extremely important
0
Frequency Percent

Source Researcher

48
Figure 1.8 indicates 70 respondents at 71.4% confirming education and training being

extremely important to the growth of SMEs. 4% say it is moderately important, 2% as

slightly important and 22 respondents at 22.4% as very important. This shows that

entrepreneurship skills trainers needs a certain level of education in order to understand

all the skills trained and be able to utilise them effeciently for growth of their SMEs.

Table 4.6: In your opinion what Levels of education would you recommend
entrepreneurs should possess?

Frequency Percent

Primary level 16 16

Secondary level 82 83.6

Total 98 100

Source: Researcher

From table 4.6 findings shows a small number of primary education at 16 (16%),

secondary level shows a big percentage at 83.6% of respondents. This shows that even

though abig number of entrepreneurship tranees are of primary level, respondents support

the fact that at least secondary level of education is neesded by entrepreneurs to run their

SMEs to growth and development. This can be enehanced by continous training and

development of entrepreneurs in relevant areas.

Figure 1.9 is about training and development, as indicated in the table entrepreneurs say

training and development is needed at 65%. Training and development is highly needed
49
to keep on updating the skills in order to have a competitive advantage over your

competitors in business. Training and development creates awareness, new skills are also

learnt through training and development as well as improving entrepreneurs skills

through mentorship and benchmarking. Training and development exposes entrepreneurs

to better working skills as they interact with some great entrepreneurs and be able to learn

from them as they grow and develop their enterprises and be able to compete globally.

Training and development will shape the entrepreneurs in order to be able to change with

global changes and keep informed as they grow their SMEs. as in figure 1.9

Figure 1.9: How often would you recommend for training and development of
entrepreneurs skills

80

60 every three
months
40
Twice a year
20
Once a year
0
Frequency Percent

Source: Researcher

Figure 1.9 Shows abig percentage of respondents eager to train and develop their skills
at 65% twice a year, 22% indicated a wish to train and develop their skills every
threemonths, while only 12.2% said they would prefer the training and development done
only once a year. The responses shows the critical importance of training and
development of entrepreneurship skill to entrepreneurs in the performance of SMEs.
Therefore process of growing and developing entrepreneurship skills is of great
importance as entrepreneurs strive to grow and expand their SMEs.

50
4.2.3 Objective three: Challenges faced by AGI trained entrepreneurs to grow and
Develop their entrepreneurs.

Most of the SME’s owners lack some management skills in change management, new

skills such as limited capacity in marketing, strategy, acquisition of the new knowledge,

innovation, discovering opportunities and networking. All these are very important to

compete with external pressures. Access to finance is a big challenge to SMEs as they

lack collateral and it is always a problem to compete with large firms and manage

external pressures when you don’t have enough funds. There is also need for training and

development and lack of technology in almost all SMEs. Most of the SMEs lack ability

to communicate due to lack of information, lack of raw materials. Most of these SMEs

operate with no business plan which would guide the SMEs to growth and expansion.

Table 4.7: Access to finance

Frequency Percent
Strongly agree 24 24.4

Agree 23 23.4

Undecided 28 28.5

Disagree 13 13.2

Strongly disagree 10 10.2

Total 98 100

Source: Researcher

51
According to table 4.7 in terms of whether they have access to finance 24 (24.4%)
strongly agree, 23 (23.4%) agree, 28 (28.5) were undecided, 13 (13.2%) disagree while
10 (10.2%) strongly disagree. This clearly shows that these women have a challenge in
having access to finance. They say their SMEs activities are underestimated and most of
them have no collateral being asked by financial institutions as a condition to have loans.
This is a great challenge to their capabilities to the growth of their SMEs.

Table 4.8: Access to information to exploit business opportunities

Frequency Percent

Strongly agree 10 10.2

Agree 11 11.2

Undecided 25 25.5

Disagree 22 22.4

Strongly disagree 30 30.6

Total 98 100

Source: Researcher

Table 4.8 above portraits the respondents at 10 (10.2) as strongly disagree to having

access to information to exploit business opportunities. 11 (11.2) agree, 25 (25.5) were

undecided to this factor, 22 (22.4) disagree while 30 (30.6) strongly disagree. This is

rather an important factor to the growth of SMEs. This means that if you cannot exploit

business opportunities then your business will be faced with difficulties in terms of

growth and expansion. When you are not informed you are likely to implement wrong

ideas which will not help you in your business. An entrepreneur who is not always

52
informed is likely to miss innovations and will miss updates which will lead to total

failure.

Table 4.9: Access to necessary technologies

Frequency Percent
Strongly agree 8 8.1

Agree 6 6.1

Undecided 32 32.6

Disagree 22 22.4

Strongly disagree 30 30.6

Total 98 100

Source: Researcher

Table 4.9 shows how technology levels are still very low where 8 (8.1%) strongly only

agree to have access to necessary technologies, 6 (6.1%) agree, (32.6) are un decided, 22

(22.4) disagree to have access to necessary technology and 30 (30.6) actually strongly

disagree. There was no technology training considered by the trainers during their course

of training. Technology is very important when it comes to networking and finding

business opportunities, and remain informed.

53
Figure 1.10: Access to necessary raw materials

Strongly agree

Agree
40
Undecided
35 Disagree

30 Strongly disagree

25

20

15

10

0
Frequency Percent

Source: Resercher

Figure 1.10 shows 36 (36.7%) respondents who strongly agree having access to necessary

raw materials. 28 (28.5%) also agree to have access to raw materials, but 18 (18.3) were

un decided. 9 (9.1%) disagree where as 7 (7.1%) strongly disagree to having access to

raw material. The findings to access to law materials are low, all the respondents agreed

that raw materials are hard to get as most of them are imported or bought from those who

import them at a higher cost and this makes the selling price to rise and marketing those

products is not that easy competing with the well established businesses.

54
 Cooperation areas between SMEs and TVET

There are some areas where TVETs should be responsible to continue giving assistance

to SMEs as they start and grow their businesses, such areas are mostly supports, further

trainings and development. The following tables assess whether TVETs provides the

required supports to SMEs. in order to grow and develop their SMEs.

Figure 1.11: Training and development from TVET to SMEs 2012 to 2014 june.

50
Strongly agree
40
Agree
30 Undecided

20 Disagree
Strongly disagree
10

0
Frequency Percent

Source: Researcher

Figure 1.11 clearly shows 14 (14.2%) responses who strongly agreed to having training and
development from TVET. Only 10 (10.2%) agree, 12 (12.2%) were un decided. 22
(22.4%) disagree and 40 (40.8%) strongly disagree. The findings indicate almost no
training and development because the project is still in its entrepreneurship skills training
phase and starting SMEs. as respondede by TVET heads.

55
Table 4.10: Technology supports from TVET to SMEs

Frequency Percent

Undecided 10 10.2

Disagree 36 36.7

Strongly disagree 52 53.0

Total 98 100

Source: Researcher

Table 4.10 indicates that there is actually no technology supports from TVET, since no

response was got from respondents on strongly agree and agree on having technological

supports from TVET. 10 (10.2%) were undecided, 36 (36.7%) disagreed where as 52

(53%) respondents strongly disagreed to having technology supports from TVET.

Technology is an important factor with the present global competition, change and

performance of entreprises can’t be achieved if entrepreneurs continue to be ignorant in this

area. A lot of business is now done on line, as well as getting quick and important

iformation concerning business.

56
 CHAPTER FIVE: SUMMARY, CONCLUSIONS AND
RECOMMENDATIONS.

5.0 Introduction

This chapter consists of the discussion of the findings, conclusions recommendations to

assist solve problems that were discovered in the findings regarding the study. SMEs play

a big role in poverty reduction therefore empowering small and medium enterprises have a

fundamental impact on the development and growth of the economy and the well being of

the society. This study was to analyse the entrepreneurship skills and how they can

contribute to the performance of SMEs.

5.1 Summary of the Findings

The findings of the study was according to the research objectives, research questions as

well as variables. Entrepreneurial skills are identified and effectively initiated in training

courses or programmes. Business or entrepreneurial failures are readily attributed to

inadequacy of financial resources, but one of the most serious impediments is the limited

capacity of people who start and operate the businesses in terms of skills, attitude,

motivation, exposure and experiences. Business success in SME’s is related to the

achievement of goals and objectives. High performing, entrepreneurial-oriented firms are

successful in exploiting business opportunities and overcoming challenges. The general

objective was to examine the influence of entrepreneurial skills to women trained in AGI

project business performance. Questions based on demographic characterristics of

57
respondents. Most of the respondents are from 16-20 of age since most of them are primary

leavers who were unable to make it to high level of education. This project also train young

girls and women not above 24 years which justifies this age. According to marital status of

the respondents most of them are still single considering their age, with afew exception who

were married at an early age and most of them have a family size of 1-3 children. Abig

number are of primary level of education (73%) and this project was initiated to help

empower them with skills and be self surstaining.

AGI project trains trainees in entrepreneurship skills and skills like communication,

marketing, financial management, human resource, decision making skills, accounting skills

were trained at above 80% and respondents extremely agree that these skills are important

to the growth of their SMEs. However since their levels of education is very low they agree

that these skills can be developed on a strong foundation of primary and secondary

education. In anlysing the challenges faced by these young entrepreneurs mostly they have

a problem of lack of funds since they lack collateral required by financial institutions. They

are advised to make cooperatives and make some savings which will be based on to be

funded. They also lack raw materials, which they say are either imported or bought at a

higher price. These entrepreneurs lack technology know how since this was not considered

in their training, as well as access to required information about how to grow and develop

their SMEs. Most of them also lack abusiness plan that would guide them as they grow and

expand SMEs. Basing on the findings entrepreneurship skills are of great importance in

influencing business performance as long as challenges are managed and focus mantained.

58
5.1.1 Objective One: To examine the contribution of entrepreneurial skills on AGI
trained women owners of SMEs performance.

The findings show that AGI trained entrepreneurs owners of SME’s were working and

operating on a small scale in terms of firm/structure characteristics. Though members lack

capital they are able to run and manage their SMEs helped by the use of the skills they

attained from the training. The researcher discovered that most of the respondents at 86%

received sufficient training concerning skills. Respondents agree strongly to have benefited

from the training. Findings reveal that entrepreneurship skills influence the success of

business in the SME’s. as shown in the study as respondents indicate 65.3% financial

skills, 66.3% marketing skills, 61% communication skills, 55% human resources as all

being extremely important to the business. Thus, entrepreneurial skills influence the growth

and development of business. Respondents agreed to having benefited from the training

with exception of technology skills. With the help of the skills they have attained, those in

hand craft are able make some products as they wait for finances to be able to expand their

SMEs. Akintoye (2008) argues that accounting skill is necessary for successful

entrepreneurial and small business development.

According to Cook and Nisxon, (2000) poor management and accounting practices have

hampered the ability of smaller enterprises to raise finance. Akintoye (2008) recognise

accountong skills as the totality of skills. World Bank (2005), ILO (2003) say women

entrepreneurs in SMEs are affected by lack of entreprenurial, managerial, marketing skills,

technology equipment and know how and lack of accessibility to information and

knowledge. Lack of quality awareness, and lack of mutual recognition schemes.

59
5.1.2 To assess the extent to which education/training has influenced AGI trained
women owners of SMEs performance

Education and training enhances the growth of SMEs as the entrepreneurs who trained in

GIproject AGI project witness having benefited a lot concerning the skills they got in

growing their trai. The SMEs. The study done shows education levels of respondents at

73.4% primary levels of tion, th of education. This may affects the level of learning and

understanding of the skills trained. of the The Trainers try to instruct the trainees in the

language they understand better in order to make them fully them benefit from the training

though they say this is not easy. Tikly and Barret (2009), l dentifies identifies education as

having an instrumental value in terms of supporting livelihoods, gap in d generating

income, and reducing human insecurity. Okurut (2008) proposed that the returns n micro-in

in micro-enterprises are positively and significantly influenced by education levels.

According to UNECE, (2004), women on average have less access to education than men,

and technical and vocational skills can only be developed on a strong foundation of basic

primary and secondary education. The critical importance of designing appropriate

education systems to promote entrepreneurship and to prepare school leavers for self-

employment should be stressed in several studies.

5.1.3 Challenges faced by AGI trained entrepreneurs in the growth of their SMEs.

In relation to entrepreneurship skills, most of the SME’s owners lack some management

skills in change management, new skills such as limited capacity in marketing, strategy,

acquisition of the new knowledge, innovation, discovering opportunities and networking.

60
All these are very important to compete with external pressures. Access to credits is a

big challenge to SMEs as they lack collateral and it is always a problem to compete with

large firms and manage external pressures when you don’t have enough funds. There is

also need for training and development, only 14.2% strongly agree to having further

training and development from TVET in supporting them to grow their SMEs. Only 10%

strongly agree to have a bility to exploit business opportunities. Competitive market

environment is a big obstacle, since these are startup SMEs that lack experience and

customer focus. Lack of proper book keeping, lack of proper records or lack of records at

all is still common in alsmot all SMEs. Inability to separate business and family, or

personal finances, lack of business strategy, inability to distinguish revenue and profit.

According to the East African community’s report on SMEs in Rwanda (June2010),

93.07% work in commerce and services. This indicates the need to address the

challenges by SMEs, in order to build an economy based on value added export.

5.2 Conclusions

SMEs have been recognised by governments as the main contribution of economic

growth and a major factor in promoting private sector development and partnership. The

development of SMEs sector therefore represents an essential element in the growth

strategy of most economies and is in particular significant in the case of Rwanda.

Small businesses are the backborne of economic stability and l believe that diversity is

the key to the development and stability of the business in emerging economies.

Women’s entrepreneurship is an increasing phenomenon in Rwanda as they assist in the

economic growth and development of the country. These women create employment for

61
themselves and the other members of the society, but they are also able to provide for

themselves and their families financially. Knowledge, attitudes and skills must be

effectively addressed and taught in an integrated manner through managerial training and

development to enable an entrepreneur to produce outstanding performance and

maximize profit while managing a business venture or an enterprise. The findings

indicate very low understanding because of very low levels of education. Concerning the

personal skills importance for business success of the SME’s for production and service

business.

Though skills were taught and understood there is still a problem in technology which

was not considered and it is really vital in today’s business though it would not be simple

comparing the trainees education level. There is also a problem of comparative

advantage which needs one to have the strongest focus on basic factors of advantage.

There is also a need for the business to stay focused with the help of appropriate

management decisions like flexibility, ability to adapt quickly to changes, strategic

planning, ability to seize opportunities in new markets or products, financial

management, and a proactive approach to drive the business forward. SMEs are

increasingly recognised as a principal means to achieve over half the total share of

employment, sales and total contribution to GDP. Unfortunately, SMEs have not played

the significant roles they are expected to play in Rwandan economic growth and

development.

62
5.3 Recommendations

From the findings, a number of recommendations can be made. The owners of the SME’s

should strive hard to make use of the policies concerning the SME’s development, by

collaborating with the government and other stake holders whenever possible especially

in education and training which are essential for success of any business. For the

government to succeed in reinventing the future of SMEs, it has to extend the current

reforms to the educational system to make it more functional, relevant and need-oriented

and driven. The thrust and emphasis should be on modern technology, practical

technological and entrepreneurial studies aimed at producing competent entrepreneurs.

This implies a change in our culture, value system and orientation as well as Rwandan’s

overall attitude, ethics and appreciation of the need for everyone to contribute in making

the country economically independent. To assist in creating an environment where

women are empowered, they must be well-trained leaders, therefore leadership training

development is important.

SMEs encounter challenges in owning and operating their own businesses these

challenges such as access to credit to start and grow their businesses, additionally, their

low level of education regarding their profession makes low turnover and slow economic

growth. These challenges can be effectively harnessed by the potentials of the female

education and training in entrepreneurship skills as they innovate and create new ideas as

63
well as the creation of employment, generate income for themselves and their employees

improving their standards of living. The study discovered that to fully understand these

skills at least the levels of those who undergo entrepreneurship skills training need to

have some secondary level of education. The skills included financial literacy,

organization, leadership, bookkeeping and accounting, business planning and finance,

market assessment, role of and means of assessing credit. It is very hard for the trainees

to follow and understand the entrepreneurship skills lessons as mentioned above with

such background education most of the trainees in this project are primay school level of

education. Special incentives financial and regulatory are needed to support SME’s

development and encourage businesses to become formal in the long run. SME’s support

groups including the government should focus in enhancing awareness of the SME’s

policies, financial assistance, training and entrepreneurial orientation. SME’s should

strive to gain ability to gather and control resources, increase motivation to the staff so

that the SME’s can work productively and efficiently. Priority should be to train staff so

that they can be able to cope with the challenges which hinder business success. It is

crucial to promote entrepreneurship and business culture for a more conducive business

environment. Special financial services aimed at small businesses should be promoted or

introduced. These services should be easy to obtain and maintain financial support needs

to be targeted according to businesses' needs and potential.

Banks should understand the characteristics of the population that comprises of female

entrepreneurs startups who are currently borrowers. Understanding the population will

assist them to review their current loan portfolio for small and medium enterprises.

64
Additionally, banks should have portfolios specifically for female entrepreneurs within

the small and medium scale enterprises in order to increase access to credit as well as

have a certain amount of interest charged on their loans. For example, to have special

interest rates targeted towards female entrepreneurs within SMEs. Likewise, they should

provide specific information to borrowers regarding loans and the specific requirements

needed in obtaining the loan and how they should be utilized efficiently. There should be

more awareness regarding network affiliations such as the women’s associations in the

country. Associations can have presentations in which they can talk about their various

enterprises. Providing information on their organizations adding more knowledge to the

various SMEs owners and may motivate them to join the different organizations.

Additionally, government officials such as the ministry of women affairs should provide

training workshops targeted towards women within SMEs in business management and

be monitored and evaluated for efficiency. For the government to succeed in reinvesting

the future of SMEs, it has to extend the current reforms to our educational system to

make it more functional relevant and need oriented. The emphasis should be on modern

technology and entreprenerial studies aimed at producing entrepreneurs. This implies a

change in our culture, value system and orientation as well as Rwandans overall attitude,

ethics and appreciation of the need for everyone to contribute in making our country

better than it is today.

5.4 Suggestions for further study

In this study, the analysis and conclusion would serve as a departing point for further

researchers. There is substantial need to study on the role of entrepreneurial

65
competencies, and networking. The study covered just a small part of Kigali, ( kicukiro)

district, but a similar study can be carried out in other parts of the country to verify

whether what was observed in this small part of Kigali would be the same elsewhere. For

example this same project is in other districts of Gasabo, Rulindo Gicumbi. Future study

should also consider the regional differences when analysing the impact and

contributions of SMEs in Rwanda.

66
 REFERENCES

Abbott, P., Batoni, F. & Mugisha, R. (2011).Women’s Economic Empowerment. Ministry

of Trade and Economic Planning: Kigali.

Acs, Z. J., & Virgil, N. (2010). Entrepreneurship in Developing Countries. Journal

Foundations and Trends in Entrepreneurship. Vol. 6 (1) pp 1-68.

Agomuo, E. E. (2002). Entrepreneurship skills acquisition models for small scale

business management: Book of Reading in Business Education Nigeria:

Association of Business Educators.

Akande, O. O. (2011). Accounting skill as a performance Factor for small Businesses in

Nigeria. Journal of emerging trends in Economics and management Sciences

Vol. 2 (5): 372-378

Akintoye, I. R; & Oladeja, M.O (2008). Theory of enterprises: The Nigeria experience.

International Journal of social sciences, of Uyo Nigeria. Vol.3 (7) pp.245-

298.

Baines, E. D. (2005). Les femmes aux mille bras: Building Peace in Rwanda: Kigali-

Rwanda

Bijlsma, S. (2009). Opportunities for change: Education innovation and reform during

and After conflict, Paris: International Institute

67
Caroline Wangeci Njoroge & James M. Gathungu (2013). The effect of entrepreneurial

education and training on development of small and medium enterprises.

International Journal of Education and Research. Githunguri .Kenya.

Coleman, S. (2007). The Role of Human and Financial Capital in the Profitability and

Growth of Women-owned Small Businesses. Journal of small Business

management Vol. 45(3) pp 904-937

Cook, P. & Nixson, F. (2000). Finance and Small and Medium-Sized Entreprises

Development. London: prentice Hall

Cutura, J. (2008).Voices of Women Entrepreneurs in Rwanda, International Finance

Cooperation: World Bank Group.

De Geus, A. (2010). Women Entrepreneurship: An asset for society and economy.

Retrieved December 24, 2013, from htt://www.oecd.org/

De Groot, T. U. (2001). Women Entrepreneurship Development in Selected African

Countries. Vienna: United Nations Industrial Development Organization.

Desai, S. (2009). Measuring Entrepreneurship in Developing Countries. Research Paper

No.2009/10,United Nations University, World Institute for Development

Economics Research.

Hamilton, H. B. (2000). Rwanda’s Women: The key to reconstruction, in the journal of

humanitarian assistance, Retrieved online May 27, 2011 from

http://www.aaw. cc./PDF-files/ Rwandas%20 women 2.pdf, accessed on 27

may 2011.

Hook, J. L. (2008). Gender expectations? Reconsidering single fathers’ Childcare time.

Journal of Marriage and Family, Vol.70 (6), 978-990.

68
International Labor Organisation & AFDB. (2004). Supporting Growth-Oriented Women

Entrepreneurs in Ethiopia, Kenya & Tanzania. International Labour Office

Seed Programme &African Development Bank Private Sector Department.

International Labor Organization (2002). Jobs gender and small Enterprises in Africa

Preliminary report, women entrepreneurs in Tanzania by University of Dar-

es-salaam, Entrepreneurship Centre. Geneva: International Labor Office

International Labour Organization (2008), Women Entrepreneurs in Kenya: Factors

affecting Women Entrepreneurs in Micro and Small Enterprises in Kenya,

Geneva. International organization.

Kirubi, C. (2006). How important is Modern Energy for Micro-Enterprise? Evidence

from Rural Kenya. Berkeley: University of California.

Kothari, C.R. (2009). Research methodology, Methods and techniques. NewDheli: New

age International (P) Limited Publisher.

Lim,W.M., & Ting, D.H. (2009). Research methodology: a toolkit of sampling and data

analysis techniques for quantitative research.

Lumpkin,G.T.& Dess, co. G. (2001). Linking Two Dimensions of Entrepreneurial

Orientation to Firm Performance: The Moderating Role of Environment

and Industry Life Cycle. Journal of Business Venturing, Vol 16,(5): 429-

451.

M.Botha, G.H Nieman & J.J Van Vuuran. (2006). International Journal of

Entrepreneurship. Advancement, Strategy & Education. ISSN 1177-0317

Pretoria. South Africa.

69
Mahbub, U.H. (2002). Human Development Centre in South Asia: Gender Question

London: Oxford University Press.

Mazurana. B. & Muzyka.D (2000).Mastering Entrepreneurship. London: Prentice Hall

Ministry of Education (2007). Education Sector Strategic Plan. 2008-2012, Kigali:

Republic of Rwanda.

Ministry of Finance and Economic Planning (2007). Economic Development & Poverty

Reduction Strategy 2008-201. Kigali: Republic of Rwanda.

Ministry of Finance and Economic Planning. (2000). Vision 2020. Kigali: Republic of

Rwanda.

Ministry of Gender and Family Promotion (2010). National Gender Policy. Kigali:

Republic of Rwanda.

Ministry of Trade and Industry (2010a). Private Sector Development Joint Sector Review

(JSR) Summary Report 2009/2010, Kigali: Republic of Rwanda

Naude, W. (2011a), Entrepreneurship, in and Economic Development: An Introduction

Entrepreneurship and Economic Development, Basingstoke and New York:

Palgrave MacMillan.

Okurut, F. (2008). Determinants of Microenterprise Performance in Uganda. The IUP

Journal of Agricultural Economics, Vol. 7, pp. 77 - 87.

Organisation for Economic Cooperation and Development. Development Center. 2005).

African Economic Outlook. (2004-2005). O’Gorman (2000) The

sustainability of growth in small and medium-size enterprise, International

Journal of Entrepreneurial Behavior & Research, Vol. 7. (2) pp. 60-75.

70
Ratchusanti, S. (2008). SME. Development and Regional Economic Integration.

Thailand.

Roomi, M. A. & Parrot, G. (2008). Barriers to Development and progression of Women

Entrepreneurs in Pakistan. Journal of Entrepreneurship Vo. 8 (4)59-72

Schiebold, M. (2011). Towards a Framework of Success Determinants for Micro-

Entrepreneurs: The Case of Swiss Water Kiosk in Mozambique.Bachelor

Thesis, University of St.Gallen.

Schorling, A. (2006). The involvement of women and men in micro & small Enterprises

(SMEs) in Nefas Silk Lafto Sub City. Discussion Paper & Guideline to

Construct a GENDER- Sensitive. Addis Ababa: Nefas Silk Lafto Sub City.

Stevenson, L & St-Onge, A (2005). Support for Growth- Oriented Women Entrepreneurs

in Tanzania. ILO, Geneva

Still &Timms (2000). Women Business: the flexible alternative works style for women.

Journal of Women in Management Review, Vol. 15 (5), pp. 272-83.

Still M & Timms J. (2000a). Making a Difference: The Values, Motivations and

Satisfaction, Measures of Success, Operating Principles and Contribution of

Women Small Business Owners, discussion paper series, Centre for Women

and Business: The University of Australia,

Tikly, L. & Barret, A.M. (2009). Social Justice, Capabilities, and the Quality of

Education in Low income countries’. EdQual Working Paper Quality No.8,

United Kingdom: University of Bristol.

Ukaegbu, C.C. (2000). Working conditions and employee commitment in indigenous

private manufacturing firms in Nigeria: managing business organizations for

71
 industrial development. The journal of Modern African Studies, Vol.38 (6):

295-324.

United Nations Children’s Fund ( 2006). The state of the world’s children 2007: Women

and Children. New yolk: United Nations Children’s Fund.

United Nations Department of Economic and Social Affairs. (2009). Division of unpaid

and paid work: A source of inequality. DESA News

United Nations Development Fund for Women). (2009a). Progress of the world’s Women

2008/2009. Who answers to women?.

United Nations Economic Commission for Europe (2004). “Women’s self employment

and Entrepreneurship in the ECE region”. Background paper prepared by

the Secretariat for the regional Symposium on main streaming Gender into

Economic Policies, Geneva, 20-30 January 2004.

United Nations Economic Commission for Europe (2004). Women’s self employment

and Entrepreneurship in the UNECE Region. Fact Sheet: Review of

Implementation of the Beijing Platform for Action.

United Nations Industrial Development Organisation (2001). Women Entrepreneurship

Development in selected African countries. Working Paper (7) Lagos.

Vol. 1No.8

World Bank (2005).Doing business. Benchmarking business regulations: Doing Business

Report 2005 Washington: The World Bank.

World Bank (2006). world Bank Support Micro, Small and Medium Enterprises

(MSME). Development News Release No. 2006/230/AFR.Ghana

72
World Bank. (2000). The road to stability and prosperity in South Eastern Europe: A

regional Strategy Paper. World bank Washington DC.Washington Quarterly

Journal . 23 (4): 94-118.

APPENDICES

73
i
ii
Dear Respondent,

I am Umuganwa Jane Karagire a student of the School of Business Administration and

Public Management (MBA) Option in Project Management at Mount Kenya University.

The purpose of this study is to gather views on the Influence of Entrepreneurial Skills to

the success of Women’s MSEs in Rwanda.

The study focuses on Micro and Small enterprises. Your project has been selected as one

of the participants and you are kindly requested to give your responses. This information

is purely for academic purposes and the researcher kindly reminds the respondents that

the responses given will be used only as an input for the research work.

Recommendations made will be of benefit to small-scale businesses in general. We

assure you that your responses will be treated with utmost confidence.

Thank you very much.

Umuganwa Jane Karagire

APPENDIX 3: SURVEY QUESTIONNAIRE.

DEMOGRAPHIC INFORMATION

1. Age distribution of respondents

a. Below 20 Years

b. 21-30 Years

c. 31-40

d. Others__________________________________________________________

iii
2. Marital status respondents

a. Married

b. Single

c. Divorced

d. Widowed

3. Family size of respondents

a. Less than 3

b. 4-5

c. More than

4. Levels of education for entrepreneurs that trained in AGI project.

a. Primary level

b. Secondary level

c. Tertiary level

d. Other________________________________________________

5. Number of years in business.

a. One year

b. two years

c. Less than a year

6. What sector is your business engaged in?

a. Trade

b. Production

c. Services

d. Other______________________________________________________

iv
7. Do you think communication skills are important to your business?

a. Extremely important

b. Very Important

c. Moderately Important

d. Slightly Important

8. Do you think decision making skills are important to your business performance?
a. Extremely important

b. Moderetely Important.

c. Slightly Important

d. Very Impotant.

9. How important are marketing skills to your business?

a. Extremely important

b. Moderetely Important.

c. Slightly Important

d. Very Impotant.

10. How important are financial skills to the perpormance of your business?

a. Extremely important

b. Moderetely Important.

c. Slightly Important

d. Very Impotant.

e. Not important

v
11. Do you think management skills are important to your business performance?

a. Extremely important

b. Moderetely Important.

c. Slightly Important

d. Very Impotant.

12. To what extent is education/training important to your SMEs performance?

a. Extremely important

b. Moderetely Important.

c. Slightly Important

d. Very Impotant
e. Not Important

13. In your opinion what levels of education would you recomenmmend entrepreneurs
should possess?
a. Primary level
b. Secondary level
c. Tertiary level
d. Other _____________________________________________________

14. How often would you recommend for trainning and development of entrepreneurs?

a. Three times a year

b. Twice a year

c. Once a year

d. Once two year

e. Other_______________________________________________________

vi
 INTERVIEW QUESTIONS WITH SMES HEADS.

Factors affecting women entrepreneurs’ performance in SMEs.

The major factors that affect women entrepreneurs’ performance in SMEs are

listed below. After you read each of the factors, evaluate them in relation to your business

and then put a tick mark (√) under the choices below.

5=strongly agree 4=agree 3=undecided 2=disagree 1=strongly disagree.

No. Item Agreement Scale

Economic Factors 1 2 3 4 5 Remarks

1 I am satisfied with the financial access given

by micro finances and other lending institutions.

2 I have an access to information to exploit

business opportunities

3 I have access to necessary technologies

4 I have access to necessary raw materials

vii
The following are cooperation areas between SMEs and TVET, read each of the

areas and evaluate your business against the points and put a tick mark (٧) for your

choice.

No. Item Agreement Scale

Supports areas of TVETs to 1 2 3 4 5 Remarks

SMEs.

1 I have got entrepreneurship

training from TVETs.

2 I have got training and

development from TVETs.

3 I have got technology training

from TVET.

viii