Challenges Facing the Growth of SMEs in the Furniture Subsector in Nakuru County Town, Kenya

Abstract

The general objective of the study was to determine the challenges facing the growth of SMEs in the furniture manufacture subsector in Nakuru County town. In order to capture the required information, the study was guided by four specific objectives; which were to determine the effect of technical skills, level of market dynamics knowledge, ownership structure and availability of capital requirements for SMEs growth. The study conducted literature review in order to establish the link with past studies. The study reviewed several models on SMEs growth; stages model, static model, strategic management perspective and stochastic model. The target population under study was the licensed furniture manufacturer SMEs by Nakuru town administration in 2015. In order to realize this purpose, this study adopted descriptive survey employing the use of questionnaires and interviews to collect data from a sample size of 100 entrepreneurs in furniture manufacture in Nakuru town who were selected using stratified random sampling. . Data was analysed using descriptive statistics such as percentages, frequencies tables and figures. Using statistical package for social sciences (SPSS) version 11.0, data was analyzed based on descriptive statistics and Pearson’s Product Moment Correlation Co-efficient was used to establish relationships between independent and dependent variables. The study revealed that there is a positive relationship between technical skills, level of market dynamics knowledge, ownership structure and availability of capital requirements. The positive relationship indicates that there is a correlation between the factors and the Growth of SMEs in Nakuru town. This infers that availability of technical skills has the highest effect on the Growth of SMEs in Nakuru town, followed by lack of managerial skills, then low productivity due to using inefficient technology and availability of capital requirements tailed for SMEs growth. The study recommends that improvement in stakeholder collaboration across the industry by establishing an Industry association, establish a Kenyan Center for Excellence as a platform to provide relevant industry training and co-ordination of R&D. Establish Jua Kali focused marketing entities to facilitate access to formal markets. Key words SME, JUA KALI, Entrepreneu