Small & Micro Business Growth

risk. The fact is that the money invested in majority of the micro firms is often personal money which is generally spend on the bare essentials, for early returns, Bridge, et al,(1998). The non- existence and ambiguity of objectives within the owner-manager probably arise because they often subconsciously set objectives, which might not as well reflect in their business plans. The objectives were derived from the influence of the owner- managers, individual, socio- economic context, Paul Greenbank (2001). Lafuente and Salas (1989) cited majority of the owner- managers specified the reason for a satisfied living is linked to their family needs and nothing more beyond that. In family based business the overlap between family and business concerns has been emphasized, longenecker, et al, (1998). Further more, family business have been attached with several emotional aspects that is associated with their business, such which are hereditary and associated to kinship ties, Fletcher,(2002). The desire of family based firms for stability, inter depended ownership, stability and the urge to retain managerial ownership control by the members of the family may be as important as the desire for growth and expansion, Westhead (1997). Littunen and Hyrsky (2000) had stated that family based firms are less focused on profit and growth than when compared non- family based firms.

Porteous (2007) argues that the formally unbanked populace is limited in ability to take out loans, maintain savings or make remote payments, and these constraints can inhibit their economic opportunities. Further, Porteous (2007) contends that these obstacles could be partially overcome if financial services were delivered over mobile phones. In most of the countries, mobile phone-enabled banking services are already available and are increasingly being targeted at unbanked populations that are largely low-income and low-literate. However, there seem to be a number of issues which prevent this population from meaningfully adopting and using existing services (Hernandez, 2011). In this study, it is assumed that small scale traders are largely unbanked and that most of the banking transactions they undertake are mobile-phone based. On such basis, the study intends to analyze the effect of M-Shwari micro- credit on growth of small business enterprises at Kibuye market in Kisumu County. The micro- credit is a mobile-banking (M-banking) enabled facility that makes registered Safaricom customers to access qualified credits from the Commercial Bank of Africa (CBA) which are payable in a cycle of 30 days.

This study provides an assessment of the MSME sector and its impact on the economic devel - opment of Tajikistan, as well as an analysis of the main drivers of, and barriers to, the sector’s development. Chapter 2 analyses the role of key drivers of economic growth within the sec - tor, including an overview of the characteristics of MSMEs, key growth sectors and a detailed description of sub-sectoral development. Chapters 3 and 4 describe a field survey of MSMEs in selected sub-sectors and clustered areas across the country and provide an analysis of sur - vey responses on growth factors. Methodology and sample selection are described in Chapter 3, while Chapter 4 presents the profile of surveyed micro-entrepreneurs and growth factors of micro-businesses. Chapter 5 presents the results of the empirical analysis of responses on investments in business in relation to behavioural characteristics of entrepreneurs. These findings could help guide efforts to alleviate constraints to business growth. Chapter 6 pre - sents conclusions, with a focus on policy gaps.

These theories considered differences in attitudes and abilities among individuals as critical issues in determining why some small firms grow and others do not. Two schools of thought, the Austrian School and the Classical Economist were the first to acknowledge the role of the entrepreneur in small business development; they recognise the entrepreneur as an individual with special characteristics. Knight (1921) described an entrepreneur as someone that has the willingness and superior ability to make decisions, raise capital and assume the risk of failure. In the same vein, Schumpeter (1939) added among other things, the fact that an entrepreneur has the superior ability to perceive new market opportunities. He sees the entrepreneur as an innovator. According to the Austrian school, people have certain characteristics that are associated with the productivity for entrepreneurship. Individuals who have more of these characteristics are more likely to become entrepreneurs than those who have fewer. An individual chooses to create a new business so as to maximize his expected utility. This utility is a function of entrepreneurial activity or wage income, and of attitudes that affect the utility that the person derives from entrepreneurial activity, such as one's taste toward work effort, risk, independence, working close to customers, etc. Income, in turn, depends on the individual's ability to generate profit, such as managerial abilities to raise capital, and abilities to perceive new market opportunities and to innovate (Papadaki and Chami, 2002).

Table 11 above indicates as the base year of 2001 analysis. Three explanatory variables influencing informal finance granted by informal credit markets were estimated. It was revealed that only the size or magnitude of informal lending capital has a very significant influence at 5% level on the amount of credit loaned out to MSEs in 2001 (t=5.210; p<0.05). Other variables such as experience in lending business (t=.647; p > 0.05) and income from lending activities (t=.047; p >0.05), contrary to our a priori expectation, did not show any significant effect on the size of loans given out to MSEs by the informal lenders. This may be due to the number of clients they deal with since the market is not a monopolistic market. Moreover, size of lending capital was better in explaining the amount of loans granted to SMEs in 2001 (Beta= 0.485; p<0.05). However the value of R 2 indicated that the explanatory variables jointly accounted for 56% of the change or variation in the level of loans granted. The F-statistic of 9.233 (0.000) indicated that the model was correctly specified and is capable of explaining the relationship between the variables of interest.

Despite the substantial role of the MSEs, they are denied official support; particularly credit form institutionalized financial services organizations that provide funds to businesses. According to Afrane (2002) over the past two decades, various development approaches have been devised by policy makers, international development agencies, governments and non-governmental organizations aimed at poverty eradication through empowerment of the poor, especially through creation of MSEs. One these strategies, which have become increasingly popular since the early 1990s, involve microfinance schemes, which provide financial services in form of savings and credit opportunities to the working poor. MSEs are the backbone of many economies in the world and Sub-Saharan Africa (SSA) and hold the key to possible revival of economic growth and the elimination of poverty on a sustainable basis. According to Asman and Diaymette (2006) MFIs have become increasingly involved in providing financial services to MSEs focused on economic improvement of the poor. There is continuing and quite rapid improvement in understanding how financial services for the poor can best be provided. As part of this learning process, microfinance practitioners, donors, and governments have been interested in knowing to what extent these credit interventions impact the beneficiaries.

From the above findings, it is evident that there is no clear evidence as to the extent of MFIs contribution to the technology capability in MSEs in Tanzania, the present study seeks to identify whether there are any impacts in terms of technology improvement in MSEs in Kenya following the intervention of MFIs in the country. According to Atieno (2001) MSEs have become an important contributor to the Kenyan economy. The sector contributes to the national objective of creating employment opportunities, training entrepreneurs, generating income and providing a source of livelihood for the majority of low-income households in the country. According to the Economic Survey (2006), the sector contributed over 50 percent of new jobs created in the year 2005. Despite their significance, past statistics indicate that three out of five businesses fail within the first few months of operation (Kenya National Bureau of Statistics, 2007). According to Amyx (2005), one of the most significant challenges is the negative perception towards MSEs. Potential clients perceive small businesses as lacking the ability to provide quality services and are unable to satisfy more than one critical project simultaneously.

The sign of a regression coefficient indicates whether the correlation between each independent and dependent variable is negative or positive. The value of the co-efficient denotes how much the change is in the mean of the dependent variable as a result of a one-unit change in independent variable, while constantly holding other variables in the model. From table 8, the coefficient of education is positive which indicates higher levels of education enhances business growth measured in terms of level of productivity. Consequently, a value of 0.060 for education implies that a percentage change in owner’s level of education will increase the level of production by 6%. Thus, a higher level of education seemingly increases the possibility of increase in business performance. However, the relationship was observed not to be significant. This finding is similar to Sarwoko et al. (2013) who cited that enterprises who are run by highly educated individuals are more likely to accomplish more compared to the less educated ones. Also, Peña (2002) emphasised that human capital factors inclusion of level of education are crucial tangible component that affect firm’s growth. The study further revealed that majority of businesses that experienced increase in sales, employment and profit were likely to be managed by college graduate entrepreneurs.

road map on how to protect micro business and consolidate their growth based on women’s perspectives which are market control, equal distribution [27] to entrepreneurial opportunities, facilitating the implementation process of loan distribution and repayment, and product diversification rather than providing small loans [28]. Thus, addressing these problems by the government is important to consolidate the sustainability of micro and small business and consistently alleviate poverty. This helps to attain the objective of the new economic policy (NEP) that guides the achievement of the Malaysian 2020 vision to become a developed nation. The limitation of this research is research approach, due to time constrain this study used case study only and future researches are called to use mixed methods with large size sample to address microcredit issues in deep understanding. The study also has a limitation in exploring the factors that impede women microbusiness sustainability as well as the factors that consolidate their business sustainability. Therefore, future researches are called to explore the issues that impede women micro and small business sustainability and the critical factors that enhance their businesses’ sustainability from the perspective of women entrepreneurs. REFERENCES

transportation cost. Collectively, all of them were labelled as “Economic” The third factor identified four variables: 1, 4, 17 and 20 with an Eigen value of 2.5 and 11.74 % of the variance. The first variable expressed that the inadequate and untimely access to finance was hindering the growth and expansion of enterprises. The second variable unveiled that the lack of access to finance was hindering the growth of the business of MSME entrepreneurs. Third variable indicated that there was problem of debt collection. Last, the fourth variable draw attention towards the high acquiring cost of infrastructure. After pooling all these four variables they were named as “Financial” challenge Access to capital is one of the most critical impediments to the growth of business ventures (Ramayah, T. &Harun, Z., 2005) and its deficiency act as a hurdle for entrepreneurship development (Robertson, M., Collins, A., Medeira, N. & Slater, J., 2003;Li, W., 2007 )

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Realizing the positive impact of microfinance in poverty alleviation and hence in nation building, the government of Ghana implemented a number of programmes to promote microfinance. One of such programmes is the Micro Finance and Small Loans Centre (MASLOC). MASLOC was established in 2006 to manage micro finance schemes introduced under the second phase of Ghana’s Poverty Reduction Strategy to promote the private sector. High default rate in loan repayment is however, crippling the scheme and denying other small- business operators access to credit (Domfeh, 2010). The government of Ghana through the then Ministry of Women and Children’s Affairs (MoWAC) also provided microfinance to poor women to help finance their micro and small-scale enterprises. MoWAC established the Women’s Special Microfinance Fund with assistance from the Japanese government. The fund aimed at helping in the development of women-owned enterprises, especially those in rural and deprived areas. The fund was disbursed through some of the commercial banks, rural and community banks (RCBs) and other microfinance institutions at special interest rates to ensure sustainability of the fund (Adjei, 2010).

Moreover, the performance of a firm (including its growth) likely depends in part on the level of human capital embodied in its proprietor. For example, Bates (1990) finds that the educational level of the proprietor is positively and significantly related to small firm longevity (and thus, perhaps, firm growth). This finding echoes that of Douglass (1976). Evans and Leighton (1989) find that education, experience, and previous self- employment are important determinants of the probability of starting a small enterprise. Cortes et al (1987), argue that while older proprietors are likely to be more experienced than younger ones, they also may be less inclined or less able to make their firms grow. For metal working firms in Colombia, proprietor age and firm growth rates are inversely related. Other proprietor characteristics might also influence enterprise growth. Evans and Leighton (1989) provide evidence that the marital status of the proprietor is a significant determinant of the likelihood of starting a small business. A final example involves proprietor gender. Since, traditionally, female-generated funds are used to cover the family's basic needs female proprietors may avoid taking the risks involved with firm expansion.

As with many developing countries, there is limited research and scholarly studies about the SME sector in Kenya. The 1999 National Baseline Survey conducted by Central Bureau of Statistics, ICEG and K-Rep Holdings provides the most recent comprehensive picture of SMEs in Kenya. Mead (1998) observes that the health of the economy as a whole has a strong relationship with the health and nature of micro and small enterprise sector. When the state of the macro economy is less favourable, by contrast, the opportunities for profitable employment expansion in SMEs are limited. This is true especially for those SMEs that have linkages to larger enterprises and the economy at large. Given this scenario, an understanding of the dynamics of SMEs is necessary not only for the development of support programmes for SMEs, but also for the growth of the economy as a whole. Given the importance of small businesses to the Kenyan economy and the exposure to risks owing to their location, there was need to conduct an empirical enquiry to investigate the challenges SMEs in Nairobi face and how they manage those challenges. The study targeted those enterprises within the Central Business District in Nairobi City.

The objective of every micro-entrepreneur is to grow their businesses into large enterprises. To achieve this, most of the micro-entrepreneurs make use of microfinance services and training to improve their productivity and profitability. Many studies have been done in Kenya on SMEs and how they are influenced by microfinance services but none had focused on the effects of microfinance services on the growth of the SMEs. The purpose of this study was to find out the effects of micro-credit, micro-savings and training on the growth of SMEs in Machakos County. A survey research design was applied to study 8 types of business categories in Machakos County. Structured questionnaire was used to collect data from 100 businesses. Multiple regression analysis was used to determine the relationships between micro-credit, micro-savings, training and growth of SMEs. The results show that micro-credit, micro-savings and training jointly contribute positively to SMEs growth. However, the effect of training is not statistically significant. This could be attributed to training that is not based on the real needs of SMEs.

Yunus(2003,2010) has published his experience with the micro financing and he sees this as a poverty alleviation tool. So far most of the micro financing institutes claim that they have more than 90% recovery rate. According to Yunus (2003 ) „Poor people are bonsai people. There‟s nothing wrong with their seed, society never allowed them the space to grow as tall as everybody else.‟ His ideology is great, and with proven records it appears to be a success. But there is an ongoing debate that is Micro financing really the panacea for poverty. It is because, despite its overall success, there are a lot of cases where people eventually failed to pay off their loan and then their life had become more miserable than before. Without any doubt the global society is missing the framework that will enable these MFBs to ensure growth and hopefully sustain its growth. Also the mainstream financing institutes are lacking a model that can substantially judge small businesses like this to provide financing. This is where the main concern of the study lies.

to the MSMEs sector and account for the bulk of the labour force (Victor, 2008). Governments have realized that one way to economic buoyancy is to encourage the spirit of entrepreneurship in the citizens to contribute their quota to the growth and development of the economy. The recent global economic crisis affected productivity, business operations, and investments and reduced domestic and international demand for goods and services. Incidentally, past polices and strategies failed to generate self-sustaining growth largely because of their preference for the establishment of large scale industries. Since the 1970s, developing countries like Nigeria have been compelled, in the face of many economic problems to look for alternative approaches to development (Odubanjo, 2008). One of these approaches was the re-direction of efforts and encouragement of micro, small and medium scale enterprises. As a result, many MSMEs have metamorphosed into large industries over the years in Nigeria. The likes of Dangote industries, Domino Groups belonging to the Bruce’s and others have their companies quoted on the stock exchange (Fadaunsi, 1999).

Rural farmers present another business model; family-based and oriented towards agricul- tural activity. With household head identified as the entrepreneur in the survey, farmers are older than urban entrepreneurs. In addition to their own livelihood, farmers provide a wide range of employment opportunities in rural areas to both family members and others. Capital assets are in important indicator of MSME growth for both urban entrepreneurs and rural farmers. The means of production in each sector are different. Key assets for urban en- trepreneurs are work space (shops and service areas) and vehicles. Farmers depend on land and livestock. Lack of access to agricultural machinery is a reality of small-scale farming in Tajikistan, making labour a critical asset.

Lack of Managerial skill: Simply, managerial skills are knowledge to perform some activities or tasks. This knowledge can be learned, it also can be acquired through practical fulfillment of these activities. Therefore, skills can be acquired through learning and experience of individuals. When we talk about managerial skills, those are skills used from managers that enable them maintaining efficiency in the way how employees complete their working tasks. According to Eshetu and Zeleke (2008), Shortage of technical and business related skills constitutes a major problem experienced by female business owners. The educational curriculum prepared for students at the undergraduate level lacks focus, practical content and depth on vocational and business related skills that are essential for successfully initiating and operating micro enterprises. The fact that 56% of women business owners had poor technical skills and this shows that the Ethiopian Ministry of Education has not done enough to empower potential women entrepreneurs. Lack of access to modern technology: - Technology, as it relates to MSEs, is defined here as the ability or capability to translate and convert ideas into tangible goods and services. In addition to the capability (software) aspect, most MSEs – including those run by women – require labor-saving machinery and equipment. The lack of appropriate technology inhibits the growth and development of enterprises operated by women. For instance, women engaged in pottery and semi-processed food items like "enset”, still use age-old, crude tools that are in some cases hazardous for the health of the women involved. The quality of their products is also poor in many cases, forcing them to be sold at very low prices despite the considerable time

Entrepreneurs more likely to register in SMEs because SMEs has a low registration process, simple structure and flexible decision-making process. This makes SMEs become the most popular marketable entities registered by entrepreneurs. In the new political economy, the important player in job creation is small companies, but not large firms. These are because small companies have much more advantages than large firms. For example, small companies are able to react faster to the environment changes and small companies are more able to provide the employees with the feeling of family. Therefore, in order to maintain the sustainability of small and microenterprise, it is crucial to understand the entrepreneurial intention among micro business owner.