Abstract:
The purpose of this study was to analyse the influence of capacity building on the growth of
group based Micro and Small Enterprises in Kenya. The study was anchored on Human capital
entrepreneurship theory and Entrepreneurial orientation theory. A concurrent triangulation mixed
methodology design was adopted for this study. The target population comprised of 51 officers
from Government Sponsored Enterprise Funds and 600 group leaders of group based Micro and
small Enterprises beneficiaries of Youth Enterprise Development Fund, Women Enterprise
Funds and Uwezo Fund in Nairobi County since 2013. The study used proportionate stratified
random sampling for the group based enterprises and census for Government Sponsored
Enerprise Funds officers. The study Sample size of 240 leaders of group based enterprises was
calculated using Yamanes fomular and a census of 51 officers of Government Sponsored
Enterprise Funds. The study collected primary data using questionnaires and interviews. The
study used both qualitative and quantitative statistics. Qualitative data was analyzed thematically
and presented in narrative and verbatim form while quantitative data was analyzed using
descriptive and inferential statistics. The study found that capacity building have a significant
influence on the growth of group-based MSEs in Nairobi County. Group characteristics was
found to have an insignificant effect on the relationship between capacity building and growth of
Youth group based MSEs. The study recommends improving borrower education and
communication, providing regular skills improvement seminars, empowering group leaders,
aligning fund requirements with group-owned enterprises training needs, and developing policies
that recognize their unique needs
