Major Determinants of Small and Medium-Sized Enterprises Growth in Ragwe Market, Homabay County, Kenya in Post Covid -19

Abstract

Small and Medium-Sized Enterprises (SMEs) play a pivotal economical role in various countries. The SMEs propel the growth of a country, create job opportunities, and increase the national income. There is a number of SMEs in Ragwe market on which many entrepreneurs rely for income and livelihood. However, SMEs growth is challenged with some of them dying in their first years of operations. The main objective of this study was to examine major determinants of growth of SMEs. The specific objectives were to examine how the i) management skills; ii) availability of ready market; iii) source of capital, iv) availability and accessibility to credit facilities, v) government policies and regulations affect the growth of SMEs in Ragwe Market. This was a cross-sectional study that targeted SMEs within Ragwe Market. A sample of 41 SMEs was selected using purposive sampling. The study made use of a questionnaire and SPSS 22 was used to analyse the data. The frequencies, percentages, chi-square test, multiple linear regression and ANOVA were used in data analysis. The study found that management skills, availability of ready market, source of capital, availability and accessibility of credit facilities, and government policies and regulations significantly influence the growth of SMEs in Ragwe Market (p < 0.05) with management skills being the most important determinant of SMEs growth. The regression model with the five variables managed to explain 73.9% of variance. Therefore, further studies should be done to capture more factors influencing SMEs growth in post covid-19 era.