Challenges facing growth of smes in kenya

With no power supply in most of the rural areas, it is next to impossible to have Internet connectivity and access to information and networks that are core in any enterprise. However, medium enterprises are not covered under the act, but have been reported as comprising of enterprises with a turnover of between KES 5 million and million and employing employees.

One option left to an entrepreneur is to evade the process but this proves more expensive at the end because of penalty given.

In Britain, small scale business is defined as that industry with an annual turnover of 2 million pounds or less and with fewer than paid employees.

Challenges of Small and Medium Enterprises in Kenya

Diversify the job listings to find the most suitable employee. Consequently, most of these enterprises resort to borrowing from friends and relatives. In Kenya, SMEs play a key role in economic development and job creation.

These enterprises may not be able to provide collateral such as immovable assets due to their small asset base. New laws are being enacted in a bid to regulate the operations of enterprises. Lack of ccess to long-term credit for small enterprises forces them to rely on high cost short term finance.

This rediscovery of the importance of the spirit of free enterprise was undoubtedly prompted by the failure of centrally planned communist economies.

According to the Doing Business in Kenya report, the ease with which businesses can be registered has a bearing on the number of entrepreneurs who start businesses in the formal sector, leading to jobs and more government revenue. There is digital pide between the rural and urban Kenya.

In Kenya, starting a business involves seven procedures, takes 22 days and costs Few reach their fifth birthday- leading to concerns of sustainability of this critical sector.

They provide a seedbed for entrepreneurial talent and contribute to the competition within an economy. Most SMEs fall under the informal sector and by extension, the term informal refers to people in self-employment or small-scale industries. The World Bank notes that the ease with which businesses can be registered has a bearing on the number of entrepreneurs who start businesses, leading to jobs and more government revenue.

In Morocco, 93 per cent of all industrial firms are SMEs and account for 38 per cent of production, 33 per cent of investment, 30 per cent of exports and 46 per cent of all jobs. There are however no records to show these classifications in Kenya.

However, such regulations sometimes pose tremendous threat to the growth of small and medium enterprises in Kenya. According to the survey, 80 percent of thejobs created in the year came from the informal sector which is dominated by the SMEs. However, such regulations sometimes pose tremendous threat to the growth of small and medium enterprises in Kenya.

Medium enterprises are not covered under the act, but have been reported as comprising of enterprises with a turnover of between KES 5 million and million and employing employees. SMEs in Senegal contribute about 20 per cent of national value-added.

In this article, the following challenges are briefly discussed: Consequently, SMES are defined as; those in manufacturing with million yen paid up capital and employees, and those in the retail and service trades with 10 million yen paid up capital and 50 employees Valsamakis and Sprague, The Jua Kali sector where artisans make all types of merchandise from shoes, wheelbarrow, metal boxes and assortment constitute an integral part of the SMEs in Kenya.

Advertisement

To the extent that these enterprises operate in informal markets, the factor and product prices they face also provide a better reflection of social opportunity costs than the prices faced by large enterprises Hobolm and Kennedy, Experts however say that some of the challenges with SMEs are beyond government bureaucracy.

Adopting to new technology has also been hampered by the slow rate of economic growth in Kenya. The government recognises the role of the informal sector and seeks ways to integrate these businesses into the formal sector.

SMEs in ICT appear to be doing well with the sprouting of many commercial colleges offering various computer applications. He is qualified in both natural and social sciences. The aim of CDF is to achieve equitable distribution of development resources across regions, a thorny issue that often threatens to stretch the Kenyan socio-ethnic fabric to its limits.

This is a challenge small business have to grapple with every day and how they handle it leads to either death or survival of their enterprise.

If the government stated goal to achieve the status of an industrialized country by and the realization of vision are to be achieved, then more concerted efforts to improve the growth of SMEs must be exerted Mwaura, At last the Kenyan government appears to have woken up to the reality of this sector, which at its best is reported to have createdjobs a year.

The scenario witnessed in Kenya particularly during the climaxing period of the year testifies the need for credit among the common and low earning entrepreneurs. Elsewhere the rise of a small-business class has been hindered by political instability or strong dependence on a few raw materials.

The government has formulated strategies to quicken the processes of starting a business in favour of small firms. This will be the most viable way ahead for the economy. Challenges to SME growth in Kenya SMEs are engines of growth, vital to most economies. Research suggests that micro businesses and SMEs account for 95% of firms in most countries.

Challenges facing startups and small businesses (SMEs) in Kenya Small businesses in Kenya, like any other country in emerging markets, play a vital role in the economic growth of the country. Challenges faced by small and medium enterprises in Kenya Kiambu straw berry farmers (Kisberry) Small and Medium enterprises popularly known as SMEs are engines of growth, vital to most economies.

Assessment of Challenges facing Small and Medium Enterprises towards International Marketing Standards: a Case Study of Arusha Region challenges facing SMEs is the negative perception that their clients have on their ability to provide adequate SMEs in income growth, entrepreneurial training, and creation of technological capabilities.

challenges facing the growth of SMEs in the furniture manufacture subsector in Nakuru County Town, Kenya. The general objective of this study is to determine the. "Challenges Facing Growth Of Smes In Kenya" Essays and Research Papers Challenges Facing Growth Of Smes In Kenya SMALL AND MEDIUM-SIZED ENTERPRISES " SME " stands for small and medium-sized enterprises – as defined in EU law: The main factors determining whether a .

Challenges facing growth of smes in kenya
Rated 4/5 based on 99 review
Challenges of Small and Medium Enterprises in Kenya - New York Essays