The Evolution of Entrepreneurship in Kenya
- Interest in the development of entrepreneurship and small enterprise in Kenya gained momentum as a possible remedy to the stagnation of economic development and the escalating unemployment problem between the early 1960 and 1970s
- Although there were attempts by the government to develop entrepreneurship, the main impetus came form the international labour organization (ILO) report.
- The report centered on the potential of the informal sector and suggested that the bulk of Kenya’s urban workers were self –employed in small enterprises.
- The report proposed that the development of this sector could;
i)
promote employment
ii)
facilitate development
iii)
facilitate
equitable distribution of resources.
- Based on this report the government responded with a seasonal paper in 1973 – which recognized the role of entrepreneurship in employment creation not just in the formal sector but also in the formal sector.
- Subsequent development plans have devoted time to the development of strategies and to promote small-scale enterprises and entrepreneurs which include.
o
The industrial estate programme
o
Establishment of development agents e.g ICDC
and KIE
o
Policy and institutional framework to promote
entrepreneurs.
o
Promoting indigenous Kenyan
enterprises.
How the government planned to promote entrepreneurship
- The development plan laid down proposed to
i)
implement small scale
industrial policy
ii)
Review the
central and local government regulations that a hindrance to entrepreneurial
development.
iii)
Provision of direct assistance to the small scale businesses all over Kenya.
iv)
Establishment of
an organization that would give extension services to the small scale enterprises.
v)
Creating and
strengthening institutions and schemes for the assistance of the small
enterprise sector
vi)
Establishment
of credit guarantee
schemes for loans given by commercial banks
vii)
Establish
procedures to improve small scale training through the ministry of technical
training and Applied Technology.
viii)
Overhaul the education system i.e introduction of the 8.4.4
system.
ix)
Establish a full fledged small industrial division
in the ministry of commerce and industry – which
gave rise to the District
focus for rural
development.
x)
Introduction
of entrepreneurship education
is all levels of training.
Economic, Social and Political Factors
Affecting Entrepreneurial Development High taxation levels. For business
and personal incomes
- Which in effect reduce profits earned making it un attractive to engage in business
- Taxation of raw materials and other inputs raise production costs.
a) Corruption and official harassment
- Occurs where entrepreneurs are forced to bribe officials in various government departments to allow operation or start up.
- Raids under one pretext or another which tends to be very harassing.
b) Unregulated competition from the outside world due.
- Liberalization which opened importation competing locally produced goods.
c) Declining personal incomes of people due to
- Over-increasing cost of living
- Arise in unemployment
d) The high cost of finance
- The cost of borrowing is high
- Business collapses because they lack ability to repay loans.
e) Lack of necessary skills and knowledge due to
- lack of training opportunities
- high education costs
f) Poor transport and communication network
- Inconveniencing consumers
- High energy costs
- Lack of entrepreneurial culture
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