Operating characteristics of rural non-farm enterprises in Central Province, Kenya

Abstract

The ILO has identified seven characteristics which describe the operation of informal sector enterprises. These operating characteristics are assessed using survey data on rural non-farm enterprises located in market centers in Central Province, Kenya. Two characteristics (family ownership and small scale of operation) appear to be entirely true, but the remaining five are in need of qualification. Not all activities use labour-intensive technologies, indeed some require fairly large capital inputs. Indigenous resources are not important in many rural non-farm activities. Some important business skills are acquired inside the formal school system. There are not insignificant barriers to entering the more profitable non-farm enterprises. And these barriers, in conjunction with other factors, limit competition in some activities in many of the market centres. It appears that the operators of the more profitable and technically more advanced enterprises are forming a rural petty bourgeoisie. Thus contrary to the ILO interpretation, growth of the rural non-farm sector may be associated with greater income inequalities.