Government-Sponsored Enterprise Funds’ Mandates And Growth Of Gro`Up-Based Micro And Small Enterprises In Nairobi City County, Kenya

Abstract

The purpose of this study was to analyse the influence of the mandates of Government-Sponsored Enterprise Funds on the growth of group-based Micro and Small Enterprises in Nairobi City county, Kenya. The study’s specific objectives were to assess the influence of credit services, capacity building, and market linkages and networking on the growth of group based Micro and Small Enterprises in Kenya. The fourth objective is to establish the mediating influence of group characteristics on the relationship between the mandates of Government Sponsored Enterprise Funds and growth of group based Micro and Small Enterprises in Kenya. The study was anchored on Resource based theory, Human capital entrepreneurship theory, Market orientation 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 Enterprise Funds officers. The study Sample size of 240 leaders of group based enterprises was calculated using Yamanes formula and a census of 51 officers of Government Sponsored Enterprise Funds. The researcher obtained 207 complete questionnaires representing a response rate of 86.3%. The study collected primary data using questionnaires and interviews and used both qualitative and quantitative statistics. Qualitative data was analyzed thematically along the study objectives and presented in narrative and verbatim form while quantitative data was analyzed using descriptive and inferential statistics. The descriptive analysis included mean, frequencies, percentages and standard deviation while the inferential analysis undertaken were correlation and simple and multiple linear regression to establish the relationship between different mandates of Government -Sponsored Enterprise Funds and the growth of Micro Small Enterprises. It also assessed the mediating role of group characteristics on the relationship between mandates of the Funds and the growth of Micro and Small Enterprises in Kenya. Quantitative data was presented using tables. The study found that both credit services (β= 0.395, Sig= 0.00) and capacity building (β=0.321, Sig= 0.008) have a significant influence on the growth of group-based MSEs in Nairobi County, Kenya while Market linkages and networking (β =0.107, Sig= 0.067) was found to have insignificant influence on the growth of group-based MSEs in Nairobi County, Kenya. Group characteristics was found to have a significant mediating influence on the relationship between Government Sponsored Enterprise Funds and the growth of group-based MSEs in Kenya. Mediating variable partially mediates the relationship between credit services and MSE growth but have an insignificant effect on the relationship between capacity building and market linkages and networking and growth of Youth group based MSEs. Group characteristics partially mediates the overall relationship between Government Sponsored Enterprise Funds mandates and MSE growth. The study concludes that Government Sponsored Enterprise Funds have a significant influence on the growth of Micro and Small Enterprises in Nairobi county, Kenya. The study recommends increasing funding limits, improving borrower education and communication, providing regular skills improvement seminars, strengthening market linkages and networking, empowering group leaders, aligning fund requirements with group-owned enterprises, and developing policies that recognize their unique needs.