Determinants of Growth of SMEs in Kenya (Thesis Proposal Sample)

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Determinants of Growth of SMEs in Kenya
Table of Contents TOC \o "1-3" \h \z \u CHAPTER 1 PAGEREF _Toc416157161 \h 41.0.Introduction PAGEREF _Toc416157162 \h 41.1. Background of the Study PAGEREF _Toc416157163 \h 51.2. Statement and Research Problem PAGEREF _Toc416157164 \h 61.3. Significant of the Study PAGEREF _Toc416157165 \h 61.4. Definitions of Terms Used PAGEREF _Toc416157166 \h 7CHAPTER 2 PAGEREF _Toc416157167 \h 82.0. Introduction PAGEREF _Toc416157168 \h 82.1. Background on SME Growth PAGEREF _Toc416157169 \h 82.2. Stochastic models of Business Growth PAGEREF _Toc416157170 \h 82.3. Establishing SMEs in Kenya PAGEREF _Toc416157171 \h 92.4. Factors influencing SMEs growth in Kenya PAGEREF _Toc416157172 \h 91.Education and Training PAGEREF _Toc416157173 \h 102.Peer Influence and SMEs Development PAGEREF _Toc416157174 \h 113.Entrepreneur Innovativeness and SMEs Development PAGEREF _Toc416157175 \h 114.Licenses and Registration Processes PAGEREF _Toc416157176 \h 115.Interest Rates PAGEREF _Toc416157177 \h 126.Government Policies on SMEs Growth PAGEREF _Toc416157178 \h 127.SMEs Growth through Support programs PAGEREF _Toc416157179 \h 132.5. Conceptual Model of SMEs growth in Kenya PAGEREF _Toc416157180 \h 132.6. Accessing Growth Process PAGEREF _Toc416157181 \h 152.7. Management and Resource utilization in Institutions PAGEREF _Toc416157182 \h 17CHAPTER THREE PAGEREF _Toc416157183 \h 183.0. Methodology PAGEREF _Toc416157184 \h 183.1. Study Area PAGEREF _Toc416157185 \h 183.2. Population PAGEREF _Toc416157186 \h 18CHAPTER FOUR PAGEREF _Toc416157187 \h 194.0 Results and Findings PAGEREF _Toc416157188 \h 194.1. Tests of Hypothesis PAGEREF _Toc416157189 \h 194.2 Findings PAGEREF _Toc416157190 \h 214.2.1. Marketing & Value Addition Challenges PAGEREF _Toc416157191 \h 214.2.2. Bylaws and Administrative Challenges PAGEREF _Toc416157192 \h 224.2.2.1 Management of activities PAGEREF _Toc416157193 \h 224.2.2.2 Underdevelopment in Counties PAGEREF _Toc416157194 \h 224.2.2.3 Enforcement of Regulations PAGEREF _Toc416157195 \h 224.2.2.4 Introduction of goods or services to the market PAGEREF _Toc416157196 \h 234.2.2.5 Market Conditions in Kenya PAGEREF _Toc416157197 \h 23CHAPTER FIVE PAGEREF _Toc416157198 \h 255.0. Discussions PAGEREF _Toc416157199 \h 255.1. Analysis of the Situation of SMEs in Kenya PAGEREF _Toc416157200 \h 255.2. Strategy for Marketers PAGEREF _Toc416157201 \h 255.3. Marketing Mix PAGEREF _Toc416157202 \h 265.4. Recommendation towards the Growth of SMEs in Kenya PAGEREF _Toc416157203 \h 26b)Establishment and support of SMEs groups PAGEREF _Toc416157204 \h 27c)Formulating SMEs programs PAGEREF _Toc416157205 \h 27e)Establishment of SMEs based Financial Providers PAGEREF _Toc416157206 \h 27f)Coordination of activities PAGEREF _Toc416157207 \h 28g)Information and skills sharing PAGEREF _Toc416157208 \h 28h)Availability of Financial Institutions PAGEREF _Toc416157209 \h 28CHAPTER SIX PAGEREF _Toc416157210 \h 326.0 Conclusions PAGEREF _Toc416157211 \h 32Works Cited PAGEREF _Toc416157212 \h 35
CHAPTER 1
1 Introduction
Most countries have recognized the important role of micro, small, and medium enterprises (SMEs) in contributing to a significant share of employment in the national economy. Especially in emerging markets, the growth of SMEs leads to greater growth prospects for the economy along with technological advancement. The aim of this study is to explore the factors influencing the development of SMEs in Kenya. The study also helps to understand and analyzes the models contributing to business growth and the impacts of innovation in the era of today’s global business competitions (Sukumar and Grant 380).
The paper will further explore the model of business growth inform of four major contributors inform of personal and management demographics, business characteristics and demographic. In addition, the study incorporates a number of measures of growth that contributes to the development of SMEs in Kenya such as innovations, policies, organizational influences, and investments. Business growth has been described as a progressive realization of worthy ideals for a period of time provided that there are a number of inputs to an idea. Business inputs contributing to growth include resources, profitability, goals, and the business stage.
Since 1972, International Labor Organization (ILO) published a report on GDP, employment and equity in Kenya and seen the need for SMEs to foster income and development to the country. A similar report was produced in 2011 by the African economic outlook that shown that SMEs contributes to 85% of Kenya employment which is equivalent to 20% contribution to the GDP (Cyprian 89). The report indicated that there is the need for developing the sector through the provision of necessary models that can foster their developments.
The sectional divisions and chapters in the study will each contributing to the development of relevant facts needed to the study. The first section provides a descriptive background, aims, and the research process to be used within the main body of the study. In addition, the section will provide more information with regards to business growth and more so, focusing on contributing factors to SMEs growth in Kenya.
1.1. Background of the Study
Most countries have recognized the important role of micro, small, and medium enterprises (SMEs) in contributing to a significant share of employment in the national economy. Especially in emerging markets, the growth of SMEs leads to greater growth prospects for the economy along with social stability. SMEs typically drive local economies by creating jobs, fostering a competitive business environment, and expanding small industries. In a larger scale, SMEs establish intraregional trade with large-scale enterprises as globalized economy led large enterprises to seek a division of labor from SMEs to enhance business efficiency.
Involving SMEs in the national economic system is a crucial policy pillar for emerging markets; hence, most policymakers and stakeholders continuously attempt to find effective strategies to promote the growth of SMEs within their countries. As suggested by many scholars, the ease of financing accessibility from formal institutions is the most critical factor to foster SME growth without access to formal finance, SMEs will have difficulties investing, improving productivity, promoting innovation, raising competitiveness, and generating employment (Cyprian 90-92). A study of Kenya is useful for examining the development of SMEs access to formal financial institutions. In the academic setting, there are very limited papers discussing the factors contributing to SMEs growth in Kenya.
1.2. Statement and Research Problem
The growth of SMEs in Kenya is subject to unknown developments. It can start with ideas from a different individuals or sources within the financial setup. Hence, these plans are subject to numerous tests and analysis combined with technical difficulties. This is inevitable but natural. For this reason, many individual groups prefer working in a governmental banking institution rather than taking risks involved in setting up or running an SME institution. Similarly, individuals can start their own business, primarily because they are risk-averse individuals (Sukumar and Grant 384). An SME is an established institutions have reasonable facts on failures that mostly occur within the Sole proprietor form of financial investment before being monitored by governmental financial institutions. This is because of lack of innovational and management ideas on business operations. Technological advancement has evolved from different old ideas of trial and failures. When these ideas work, they require management ideas and the ability to guard those new ideas against the dangers of collapse.
1.3. Significant of the Study
This study will explore the characteristics, methods, and relevant reports on business growth and how every activity plays a role in developing a business into a successful sector. As a result, potential entrepreneurs and business consultants will use it as a guide for formation, development, and managing its various activities. Secondly, the study will be helpful to financial organizations, agencies, business advisors, and SMEs for management and growth strategies. Thirdly, the study will be useful as the source for information needed to formulate government strategies and policies making that are important in improving financial sectors, improving competencies of SMEs, strategizing and controlling SME activities, and strengthening of relationship between SMEs with various clients, and increasing SMEs strength to access finance. Finally, the information provided by various authors about the determinant of SMEs growth will be useful for comparisons and guide in making a conclusion.
1.4. Definitions of Terms Used
* Entrepreneur: an individual who identifies the availability of a commercial venture in accordance with surrounding environments, prepare the needed resources make a plan and establish a commercial enterprises.
* Economic policies: a strategic set of guidelines proposes for controlling and managing economic activities, and they include financial, fiscal, administration and judicial sectors.
* Infrastructures: they are supportive frameworks or networks needed for communication of goods or services on which the society depends on as the basis for personal development.
* Innovation: a business term referring to an activity or improved well that adds value to the enterprise and end-users directly or indirectly.
* Jua Kali: this is a Swahili term used to refer to enterprises established in an open location that develops into formal small-scale enterprises.
* Small and medium enterprises: These are small business ventures that operate locally and ar...