ENTREPRENEURIAL FACTORS INFLUENCING PERFORMANCE OF YOUTH RUN AGRO-BASED ENTERPRISES IN NGOLIBA WARD, KIAMBU COUNTY, KENYA

GODFREY MUTUMA LINGULI

Abstract


There is convincing evidence that the growth of entrepreneurship in Kenya has led to an increase in the number of SMEs in Kenya, including in the agro-based sector. Thanks to entrepreneurship, the SMEs play a key role in the economic development and contribute significantly to employment and poverty reduction among the youth in the country. Despite their significance, statistics however show that in Kenya, three out of five of the youth run small enterprises fail within the first three years of operations, and those that continue 80 percent fail before the fifth year. Consequently, it is important to focus on, amongst other issues, the entrepreneurial factors influencing performance of youth SMEs. The purpose of this study was to investigate the entrepreneurial factors influencing the performance of youth run agro-based enterprises in Ngoliba Ward, Thika Sub-County, Kenya. Four objectives guided the study; entrepreneurial skills, entrepreneurial competencies, proactive financial management and entrepreneurial training and their relationship to the performance of youth run agro-based enterprises. The study adopted survey research design with the population as the youth run agro-based enterprises and the target population as the registered youth run agro-based enterprises in Ngoliba Ward. The sampling frame consisted of 105 registered youth enterprises. Purposive sampling, Krejcie and Morgan (1970) sample size estimation table and simple random sampling were used as sampling methods to select a sample size of 100 respondents. Self-administered questionnaires incorporating both open-ended and closed-ended questions items were used to collect data from 100 respondents. Data analysis was done using the Statistical Package for Social Sciences (SPSS) programme. From the data analysis, the four independent variables (proactive financial management, entrepreneurial skills, entrepreneurial competencies, entrepreneurial training) were significant as they explained 84.2% of the performance of youth run enterprises in Ngoliba Ward. Entrepreneurial training had the best correlation of 0.763 followed by proactive financial management (r=0.761), entrepreneurship skills (r=0.520) and entrepreneurial competencies (r=0.350). The relationship between predictor variables and performance of youth run enterprises in the regression model showed that entrepreneurial training had the highest beta value of 0.443 followed by proactive financial management (beta=0.421), Entrepreneurial skills (beta=0.399) and lastly entrepreneurial competencies (beta=0.202). The findings imply that entrepreneurial training is the predictor variable that contributes the highest to the performance of youth run agro-based enterprises. The study concluded that entrepreneurship training is the best intervention in influencing the performance of youth run agro-based enterprises followed by proactive financial management. The study also concluded that institutions involved in empowering and funding the youth should ensure that the potential youth have the necessary entrepreneurial skills such as flexibility and adaptability in order to improve the performance of their agro-based enterprises. Further, Identification of gaps in the levels of entrepreneurial competencies among the youth entrepreneurs should be paramount before financial assistance is provided in order to spur innovation, creativity and enhanced performance. An area for further research is on entrepreneurial training impediments since majority of the respondents in the study area had not attended entrepreneurial training despite the same having the highest influence on the performance of youth run agro-based enterprises in Ngoliba Ward, Thika Sub-County.


Full Text:

PDF

References


Ahmad, N.H. (2009). Dissecting behaviours associated with business failure: a qualitative study of MSE owners in Malaysia and Australia. Asian Social Science, Vol. 5 No. 9, pp. 98-104.

Amenya S, Onsongo O & Guyo H. G, (2006) An Analysis of the Challenges Facing Youth Enterprise Development Fund: A Case Study of Nyaribari Chache Constituency, Kenya. Journal of Management Research. 1(2), 21 - 22.

Barlow, M. & Thomas, D. B. (2010). Executive's Guide to Enterprise Social Media Strategy: How Social Networks Are Radically Transforming Your Business. New York: John Wiley & Sons.

Bosma, N., K., Jones, E. Autio, & J. Levie (2008). Global Entrepreneurship Monitor 2007 Executive Report. Babson, London Business School and Global Entrepreneurship Research Consortium (GERA).

Bryman, M. (2011). Management of business challenges among small and micro enterprises in Nairobi-Kenya. KCA Journal of Business Management, Vol. 2, Issue 1.

Cardon, M. S. (2008). Is passion contagious? The transference of entrepreneurial emotion to employees. Journal of Business Venturing, Vol. 20(1).

Chen, C.N., Tzeng, L.C., Ou, W.M., & Chiang, K.T. (2007). The relationship among social capital, entrepreneurial orientation, organizational resources and entrepreneurial performance for new ventures. Contemporary Management Research. 3(3), 213 - 232.

Chen, Y.F., & Chao, M.C.H. (2006). Social Capital and Intangible Resources of Entrepreneurial Firms in China. Research paper. Accessed: 6 February 2014

Chigunta F. (2002). Entrepreneurship. Paper Presented at the Youth Employment Summit Alexandria, Egypt. Boston: McGraw-hill.

Chigunta, F. (2005). Youth Entrepreneurship: Meeting the Key Policy Challenges. Wolfson College, Oxford University, England.

Churchill, N.C. & Lewis, V.L. (1983). The five stages of small business growth, Harvard Business Review, vol. 61, no. 3, pp. 30-50.

Cooper, D. R., & Schindler, P. S. (2008). Business Research Methods (10th Ed.). New York: McGraw-Hill.

Economic Survey (2009). National Micro and Small Enterprise Baseline Survey. Nairobi: ICEG and K-REP.

Economic Survey, (2006). Ministry of Economic planning report on SMEs. Nairobi: Government Printers.

Eisingerich, A. B., & Bell, S. J. (2008). Managing networks of inter-organizational linkages and sustainable firm performance in business-to-business service contexts. Journal of Services Marketing. 22(7), 494–504

Ericckson, M. & Kuhn, S. (2006). Working Poverty: Job Creation and the Quality of Growth in Africa. Washington DC: World Bank.

Ernst & Young (2013). Avoiding a lost generation: Young entrepreneurs identify 5 imperatives for action. White paper produced for the G20 Young Entrepreneurs Alliance Summit. June.

Farm Management Handbook, (2012). Youth Fact Book: Infinite Possibility or Definite Disaster? Nairobi: Institute of Economic Affairs.

Florin, J., Lubatkin, M. & Schulze, W. (2003). A social capital model of high-growth ventures. Academy of Management Journal. 46(3), 374-384. from http://thenextweb.com/entrepreneur/2011/05/23/ron-conway.

Gakure, R.W. (2001). Issues Impacting on Growth of Women Owned Enterprises in Kenya. Paper presented at Shifting Gears in Women’s Enterprises Conference, Durham University, UK.

Giroux, I. (2007). An exploration of owner manager problem solving practices in small firms; the central Vancouver Island experience. University of Hertfordshire, Canada.

Global Entrepreneurship Monitor (2011). United Kingdom 2011 Monitoring Report.

Government of Kenya (2005) National Youth Policy. Government Printers. Nairobi.

Government of Kenya (2005). Sessional paper No.2 of 2005 on Development of Micro and small enterprises for wealth and employment creation for poverty reduction. Government printer Nairobi.

Government of Kenya (2006). Sessional paper No.4 of 2005 on Youth Development. Government printer. Nairobi.

Government of Kenya (2013). GEM Middle East and North Africa 2009 regional report. Available at: www.gemconsortium.org/article.aspx?id¼163 (accessed August, 2014). Government Printers, Nairobi.

Hisrich, Robert, D., Peters Michael & Sherpherd, D. A. (2005). Entrepreneurship. Boston: McGraw-hill.

Ihua, U.B. (2009). SMEs key failure-factors: a comparison between the United Kingdom and Nigeria. Journal of Social Science, Vol. 18 No. 3, pp. 199-2007.

ILO (2013). Women Entrepreneurs in Kenya & Factors affecting Women Entrepreneurs in Micro and Small Enterprises in Kenya. Small Enterprise Programme Job Creation and Enterprise Development Department. International Labour Office – Geneva.

Islam, N. & Mamun Z. M., (2000). Entrepreneurship Development: An Operational Approach. Bangladesh: The University Press Limited.

Kabahanga, M, (2013). Management of business challenges among small and micro enterprises in Nairobi Kenya. KCA J. Bus. Manage. 2(1).

Kanyari, J. W. & Namusonge, G.S. (2013). Factors influencing the youth entrepreneurs towards the Youth Enterprise Development Fund, International Journal of Education and Research, Vol. 1(5): 6-8.

Karanja, G. M. (2014). Influence of management practices on sustainability of youth income generating projects in Kangema District, Murang’a County, Kenya. International Journal of Education and Research, 2 (2).

Karongo, R.N. (2009). Investigation into the Factors Affecting the Growth of Women-owned Small and Micro Enterprises in Kenya: A case of selected markets in Eastern Province. Unpublished M.A. Thesis, Kenyatta University.

Kayanula, D., & Quartey, P. (2000).The policy Environment for Promoting Small and Medium Sized Enterprises in Ghana and Malawi, (Working Paper Series, Paper No 15). Manchester, England: University of Manchester, Department of Finance and Development Research.

Kellogg W.K, (2006). Youth Entrepreneurship; Theory, Practice and Field Development. Integral Assets Consulting Inc

Kenya Institute of Management, (2013). Discussion paper on the establishment of micro and small centers of excellence presented in a workshop held at the Kenya School of Monetary studies on 14th October 2013.

Kenya National Bureau of Statistics (2010). Population Census, 2009. Nairobi: Government printer.

Kenya National Youth Policy, (2007). Ministry of Youth Affairs Nairobi. Government Printer.

Kilonzo, P. M.(2012). Policy and Strategic Options for Enhancing the Performance of Youth-Run-Enterprises in Kenya. Investment Climate and Business Environment Research Fund (ICBE-RF). Dakar.

Kimando L. N., Njogu G. W., & Kihoro J. M. (2012). Factors Affecting the Success of Youth Enterprise Development Funded Projects in Kenya; A Survey of Kigumo District Muranga County. International Journal of Business and Commerce, Vol. 1 No. 10, pp. 61-81.

Kimuyu, M. S. (2002). Management of Business Challenges among Small and Micro-Enterprises in Nairobi-Kenya. Journal of Business management; 2, 9-10.

Kinga, M. & McGrath, H. (2002). Success and Failure of Microbusiness Owners in Africa: A Psychological Approach. Connecticut: Greenwood Publishing Group

Kirby, A.D. (2003). Entrepreneurship. McGraw Hill UK.

Kiruja, K. L. (2006). Factors influencing the growth of youth owned Micro and small enterprises in Tigania west division, Meru County, Kenya: A developing countries Analysis. Journal of American Academy of Business, 8(2).

Kombo, K., & Tromp, D. (2006). Proposal and Thesis Writing: An Introduction. Nairobi, Kenya: Paulines Publications Africa.

Korunka, C., F., Hermann, M., Lueger & J. Mugler (2003). “The Entrepreneurial Personality in the Context of Resources, Environment, and the Startup Process-A Configurational Approach.” Entrepreneurship Theory & Practice, 16(1): 23.

Kothari, C. R. (2004). Research methodology, research and techniques. New Age International publishers. Second revised edition

Krejcie, C., & Morgan, D. (1970). Social research methods. Lulea University of Technology, Sweden.

Kumar, N. (2007). Small information technology services employment and entrepreneurship development; some explorations into Indian experience. Indian journal of labour Economic, 43(4).

Kuratko, D.F, & Hodgetts, R.M. (2001). Entrepreneurship: A contemporary approach.5th ed.Harcourt College Publishers.

Kvale, H. H. (2008). The Youth Employment in East Africa: An Integrated Labour Market Perspective. Journal of African Integration Review, Vol. 1 No. 2.

Leek, S., & Canning, L. (2011). Entering and developing a service network. Journal of Services Marketing. 25 (1), 58– 67.

Levie, J. & Lichtenstein, B. B. (2010). A Terminal Assessment of Stages Theory: Introducing a Dynamic States Approach to Entrepreneurship, Entrepreneurship Theory and practice. Journal of European Industrial Training, 32(4), 96–109.

Lientz, B. & Rea, K. (2012). Dynamic E-Business Implementation Management. New York: Routledge.

Mbogo, M. (2011). Influence of Managerial Accounting Skills on MSME’s on the Success and Growth of Small and Medium Enterprises in Kenya. Journal of Language, Technology & Entrepreneurship in Africa, Vol 3, No 1.

Mengo, C. (2013). The time bomb that is millions of Kenya jobless Youths. Standard and Digital News Kenya Retrieved form www.standardmedia.coke.

Mugenda, O.M. & Mugenda, A.G. (2003). Research Methods; Quantitative and Qualitative Approaches. Acts, Nairobi.

Mullins, L. (2002). Management and Organisational Behaviour, 6th ed.Pearson.

Mwaura, T. W, Nganga, R., and Gathenya, J. (2015). Interrogating the inculcation of entrepreneurial culture among students in Kenya. International Journal of Academic Research in Business and Social Sciences, 5 (3).

Mwirigi, F, M,(2007) The Role of Government Policy in Enhancing Technology Innovation and Creativity among Micro, Small and Medium Entrepreneurs, Paper presented at the JKUAT Scientific, Technological and Innovation Conference, JKUAT, November, 2007

Nafukho, F. M., & Muyia, H. M. A. (2010). Entrepreneurship and socioeconomic development in Africa: a reality or myth? Journal of European Industrial Training, 32(4), 96–109.

Naidu, S. & Chand, A, (2012). A comparative study of the financial problems faced by micro, small and medium enterprises in the manufacturing sector of Fiji and Tonga, International Journal of Emerging Markets, Vol. 7 Iss: 3 pp. 245 – 262.

Namusonge, G. (1998). Determinants of Growth Oriented Small and Medium Enterprises in Nairobi, Kenya.

Ngugi J.N., & Bwisa, H. (2013). Factors influencing growth of group owned small and medium enterprises: a case of one village one product Enterprises. International Journal of Education and Research, 8(1): 12-15.

Nguru, A. (2009).Contemporary approaches of fostering the entrepreneurial culture among the Kenyan youth. A paper prepared by the Ministry of Industrialization, Government Printer, Nairobi, Kenya.

Odhiambo, A. A. (2013). Factors influencing performance of youth owned micro, small And medium enterprises (msme) in Kenya. International Journal of Social sciences and Entrepreneurship ,1(3), 263-272.

Okungu, K.O. (2008). Factors influencing performance of youth group micro and small enterprises in Kisumu west district, Kisumu County. Unpublished theis, Kenyatta University.

Ondeng, P. (2007). Starting a small successful business. SET Publications. Nairobi.

Organization. Geneva.

Penrose, E. (1959). The theory of the growth of the firm. Oxford: Oxford University Press.

Perenyi, A. (2008). The stage model of firm development: A conceptualization of SME growth. Hamilton, New Zealand. The University Of Waikato.

Rasmussen, E.A. & Sorheim, R. (2006). Action-based entrepreneurship education. Technovation, Vol. 26 (2), 185-194.

Ressi, A. (2011). Is there A Peak Age for Entrepreneurship? Retrieved March 1, 2015,

Reynolds, P. D. (2007). Regional Characteristics Affecting Small Business Formation. IILE Notebooks, 18.

Saleemi, N. A. (2009). Entrepreneurship simplified. Nairobi: ACME Press.

Schoof, U. (2010). Stimulating Youth Entrepreneurship: “Barriers and Incentives to Enterprise Start-ups by Young People.‖ SEED Working Paper No. 76 Series on Youth and Entrepreneurship. Small Enterprise Development Programme, ILO Geneva.

Segal, G., D. Bogia & J. Schoenfeld (2005). The Motivation to Become an Entrepreneur. International Journal of Entrepreneurial Behaviour and Research, 11(1): 42-57.

Sekaran, U. & Bougie, R., (2010). Research methods for business: a skill building approach. New York: John Wiley & Sons.

Sekeran, T. & Bougie, K. (2008). Cluster-Based Industrial Development: A Comparative Study of Asia and Africa. Basingstoke: Palgrave Macmillan.

Shabiti, H. M. & Namusonge, G. S. (2015). Factors Influencing Performance of Agro-Based Micro Small and Medium Enterprises in Kenya. A Case Study of Mwea Sub-County. International Journal of Academic Research in Business and Social Sciences, 5 (3).

Shushila, L. R. & Verma, C. J. (2010). Dimensions of Citizenship and Opportunities for youth development: The what, why, when, where and who of Citizenship Development. Applied Developmental Science, 6(4), 264-272.

Simmons, J. (2007). Small Business: A phenomenological study of Small Business failure in Maryland. University of Phoenix: Phoenix Arizona.

Simpson J & Christensen JD (2009). Youth Entrepreneurship and the ILO. Note on practices and lessons learned. Small Enterprise Programme. International Labour.

Street, R & Sykes, J (2003).Secretarial of the Entrepreneurship Group Youth Employment Network (YEN): Paper on decent work for young people, roadmap for youth Entrepreneurship Geneva.

Tripp, G. (2009). Social Capital. New York: Nova Science Publishers.

UNCTAD (2013). Empretec Annual Report 2012. United Nations publication. UNCTAD/DIAE/ED/2013/2. New York and Geneva. Available at http://www.unctadxi.org/Sections/DITE/empretec/docs/EAR2012.pdf.

United Nations Children’s Fund (2012). When the global crisis and youth bulge collide: Double the jobs trouble for youth. Social and economic policy working paper. Paris.

Variyam, J. N. & Kraybill, D. S. (1994). Managerial inputs and the growth of rural small firms. American Journal of Agricultural Economics, Vol. 76 (1).

Venkatraman, S. (2008). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1):217-226.

Wakaigua, C. W. (2013). Factors that influence the performance of youth owned enterprises in Kiambu town. Unpublished M.B.A. Thesis, University of Nairobi.

Wawire, N.H.W. & Nafukho, F M. (2010). Factors affecting the management of women groups' micro and small enterprises in Kakamega District, Kenya. Journal of European Industrial Training, Vol. 34 (2), 128 - 152

Wichmann, A. (2001). The Essence of Small Business. Prentice Hall International, UK.

Wube, M. C. (2010). Factors affecting the performance of women entrepreneurs in micro and small enterprises. The case of Dessie town. Unpublished thesis, Bahir Dar University.

Yaghmaie, C. (2005). Small Business Challenges- The Perception Problem: Size Doesn’t Matter. Washington DC: Washington Business Journal.


Refbacks

  • There are currently no refbacks.