Influence of the Need for Achievement on the Growth of Micro and Small Enterprises in Bomet County, Kenya

Abstract

Kenya had over 7.4 million MSMEs in operation in 2016 as per statistics prepared by Kenya National Bureau of statistics. The same report stated that during the same period there was high mortality rate of MSMEs with about 2.2 million businesses being closed over the last five years as per 2016 statistics on MSMES. The high mortality rate and stunted growth trajectory of MSMEs in Kenya was blamed on shortage of operating funds, increased operating expenses, declining income, losses incurred from the businesses and other personal issues as per the same data. There is an ongoing argument if the need for achievement of business owner or manager can be related to the growth and survival of the business. The need for achievement of entrepreneurs might be affecting the growth of enterprises as need for achievement of an entrepreneur differ from the characteristics of a non-entrepreneur Some researchers have defined success in terms of enterprise turnover, sustainability and growth. There are other researchers who have observed that the entrepreneurial characteristics and personal traits are indicators of success. The overall research problem to be addressed in this study is that there are other factors influencing high mortality rate and stunted growth of MSMEs in Kenya and especially Bomet County apart from the overused hindrance of finance and markets. This study will therefore investigate the influence of need for achievement on the growth of micro and small enterprises in Bomet County. The target population was micro and small enterprises in Bomet County which were 14,574 in number in 2016. The unit of observations were the managers and owners of these enterprises. The unit of analysis are the micro and small enterprises in Bomet County and their growth over the last five years. The study used stratified sampling technique to pick the respondents from the manufacturing, trade and services strata of micro and small enterprises. The sample size was 384 micro and small enterprises. Data was collected using questionnaire. Data collection was done by administering the instrument to the owners or managers of the enterprises. The data was processed using the computer software. Multiple regressions model was used to establish the relationship between the entrepreneurs’ need for achievement and growth of enterprises. The key findings were that need for achievement influences the growth of enterprises in Bomet County, Kenya. The major recommendation of the study is that there is need for the key players in the MSMEs to build the entrepreneurial characteristics especially the need for achievement of the owners and managers through training. It is also the recommendation of this study that it is not everybody who can become an entrepreneur. Methodology and resources should be avail to identify the potential entrepreneurs. It is only after identification that the required resources and other capital can be availed to them.