An investigation into the factors influencing the graduation of women-owned micro-enterprises

A survey of women-owned micro-enterprises in Nyeri Town - Kenya

Master's Thesis, 2011

78 Pages, Grade: -pass






1.1 Research Background
1.2 Statement of the Problem
1.3The purpose of the Study
1.4 The Objectives of the Study
1.5 Research Hypothesis
1.5.1 Null /Alternative Hypothesis
1.6 Significance of the Study
1.7 Research Scope
1.8 Assumptions
1.9: Definition of Terms
1.9.1 Micro- enterprises
1.9.2 Small enterprises
1.9.3 Entrepreneurs:
1.9.4 Culture:
1.9.5 Graduation
1.9.6 Gender
1.9.7 Mentor
1.9.8 MFJ: (Micro-Finance Institutions):
1.9.9 Enterprise
1.9.10 Collateral:
1.9.11 Technology:

2.1 Introduction
2.2 Theoretical Review
2.2.1 International Trends
2.2.2 Employment
2.2.3 Finance
2.2.4 Raw Material
2.2.5 Centers of Excellence
2.2.6 Property Ownership
2.2.7 Economic Theory
2.2.8 Psychological Trait Theory
2.2.9 Social-Cultural Theory
2.3 Empirical Review
2.1 Conceptual Framework
2.4.1 Financial Accessibility
2.4.2 Business Skills
2.4.3 Education and Training
2.4.4 Technology
2.2: Operational Framework

3.1 Introduction
3.2 Research Design
3.3 Population
3.4 Sample and Sampling Procedure
3.5: Instruments
3.6 Validity and Reliability
3.7. Data Collection Procedure
3.8: Data Analysis

4.1 Introduction
4.2 Descriptive Results
4.2.1 Rating the Performance of women owned micro-enterprises in the last five Years
4.2. Financial Accessibilities
4.2.3 Loan Repayment Pattern
4.2.5: Influence of financial accessibility
4.3 Multiple Responsibilities
4.3.1 Hours spent at work
4.3.2: Chances of attending a business
4.3.3. Frequency of diverting their profits
4.3.4 Government support
4.3.5 Multiple Responsibilities
4.4 Business Skill
4.4.1. Record Keeping
4.4.2: Business Registration
4.4.3. The Extent of Marketing their products / Services
4.4.4 Price Interference
4.4.5: Influence of Business Skills on woman Owned Micro Enterprises
4.5: Education and Training
4.5.1: Contribution of skills Acquired in school to the performance of their enterprise
5.5.2: Unique Skills
4.5.3: Effects of Education and Training on the Enterprise
4.6 Technology
4.6.1 Influence of technology on micro-enterprises
4.6.2 Ability to Access the Internet
4.6.3: How often they access the internet
4.6.4 The extent to which technology influenced the graduation of women owned micro-Enterprises
4.6.5 The variable that influences the graduation of micro-enterprise to small enterprise the most
4.8: Hypothesis Testing

5. 1 Introduction
5.2. Summary of the major findings
5.2.1 Factors influencing the graduation of women-owned micro-enterprise the Most
5.2.2 Financial accessibility
5.2.3 Multiple Responsibilities
5.2.4 Education and training
5.2.5 Education and training
5.2.6 Technology
5.3.1 Financial accessibility
5.3.3 Multiple Responsibilities
5.3.4 Business skill
5.3.5 Education and Training
5.3.6 Technology
5.4.1 Financial Accessibilities
5.4.2 Multiple Responsibilities
5.4.3 Business skills
5.4.4 Education and training
5.4.5 Technology



This book is dedicated to my beloved husband Mr Samuel Karanja for his unrelenting support during this hard time of research process. To my lovely children Enoch and Faith for their patience, my sun rises and sets with you.


I am grateful to God for His abiding mercies, it’s for him that I have come this far. My sincere thanks go to my supervisors Mr Mungania and Mr Alex Wachira and staff of Kenya Methodist University. I also appreciate the encouragement I have continually received from Prof. Kimani Njogu. I would like to thank Mary who tirelessly typed this work and would also like to thank all MBA students for their encouragement and support.


The importance of Micro and Small Enterprises (MSEs) in contributing to job creation and output growth is widely accepted in both developed and developing countries, of particular interest is the process of expansion from micro to small that growth oriented make their most tangible contribution to economic growth and job creation. .Women-Owned micro enterprises are a powerful force for growth and development thus making important contributions to the economy as workers and as entrepreneurs to the welfare of their families. The researcher investigated why Women-owned enterprises remain the same way year in year out without, an increase in number of employees or any other sign to indicate graduation from one level to another. The researcher wanted to find out why enterprises owned by women operate under significant constraints which greatly inhibit realization of their full potential. Many developing countries have attempted to put in place various intervention programmes to address factors that affect the graduation of women owned micro-enterprises; unfortunately many of them are policies yet to be implemented. Through the assistance from Nyeri municipal-council, the researcher acquired the target population of Micro-Enterprises within Nyeri town which was the survey under study. The research design that the researcher used was the descriptive survey research design. Variables, for instance financial accessibility was looked at among others and their influence on graduation of micro-enterprises. The instruments that the researcher used were the Questionnaires and Interviews. The researcher came up with comprehensive results that can be useful to women in micro-enterprises and the

Government at large. Pre-testing procedure was carried out to ensure the validity and reliability of the data to be collected. A descriptive statistic procedure was used to carry out the data analysis. Bar-charts, tables and pie-charts are used for data presentation. Some of the major findings in this research include the fact that many women operating micro-enterprises started their enterprises with personal savings as they could not access loans from formal institutions due to lack of collateral- Due to their low level of education, majority of them exhibited challenges in record keeping as well as marketing which are very essential for graduation of an enterprise from micro to small. Many of them indicated to be challenged technologically, hence accessing the internet and even engaging in E-commerce seemed almost impossible to many of them.


Table 3.1: Target Population in Nyeri To

Table 4.1: Response Rate

Table 4.2: Hours spent at work

Table 4.3: Government Support

Table: 4: 4 Education Level

Table: 4.5: Influence of Technology on Women owned-enterprises

Table: 4.5: Influence of Technology on Women owned enterprises

Table 4.7: Influence of Technology l

Table 4.7: correlation between financial accessibility and the rate of graduation of women owned micro- enterprises to small enterprises

Table 4.8: The correlation between multiple responsibilities and the graduation of women- owned micro-enterprise to small enterprises

Table 4.8: The correlation between multiple responsibilities and the graduation of women owned micro-enterprise to small enterprises

Table 4.10: The correlation between education, training and the rate of graduation from micro to small enterprises

Table 4.11: The correlation between technology and the graduation of women-owned micro enterprises to small enterprises

Table 4.12: Hypothesis Testing Table

Figure 4.1: Performance Rate for the last five years

Fig 4. 4: Women enterprise Fund

Fig 4.5: Influence of financial accessibility


Figure 2.1: Conceptual Framework

Figure 2.2: Operation Frame work

Fig 4.2: Financial Accessibility

Figure 4.3: Loan Repayment pattern

Figure 4.6: chances of attending a Business Seminar

Figure 4.7: Diversion of profit

Figure 4.8: Influence of Multiple Responsibility to their performance

Figure 4.9: Record keeping

Fig 4.10 Business Registration

Figure 4: 11: Ability to market product

Figure 4.12: Government intervention on price

Figure 4: 13: Influence of Business Skills

Figure 4.14 Contribution of Education in Skills Acquisition

Figure 4: 15 unique skills

Figure 4.16: The effect of Education and Training on the enterprise performance

Fig: 4: 17 Ability to Access the interne

Figure 4: 18: Internet Access

Figure 4.19: Variable most influencinge



This chapter discusses the background information about the study, the statement of the problem, purpose of the study, the objectives of the study, research hypothesis, significance of the study, research scope, assumptions, and the definition of important terms used in this study.

1.1 Research Background

The definition of a micro and a small enterprise depends on a number of factors such as the purpose of the definition, the nature and activities of the business, the level of development in the country the definition is being used, the interest of the perceiver, the turn-over rate in the enterprise, the annual level of wages or the salary expenditure, the legal structure of the firm and even the amount of energy consumed in the firm.

In the Kenyan context, an enterprise employing 0-9 people is considered as micro and one employing 10-49 is considered a small enterprise, Sessional paper No. 2, (Gok.2005). In developing countries which Kenya is inclusive, there is evidence of slow graduation of women owed micro enterprises to small enterprises. This is generally attributed to hidden and largely in advertent biases the economic policies of these countries that militate against the gradual and organic growth of their enterprises. According to the department of MSE Development, the MSE sector experienced substantial growth from 2000-2002 increasing to 2.8 million enterprises and MSE employment of 5.1 million persons, accounting for 74.2 per cent of total employment in 2002, Economic survey (Gok, 2003).

Women constitute the bulk of players in the micro and small business enterprises despite encountering diverse impediments in their venture. For instance, micro enterprises owned by women in Nyeri town seem stagnant with very minimal signs of growth. (Lois, 2006) acknowledges that women in micro-enterprises have the potential to move into the 'economic grid' but they need support, encouragement, visibility and economic empowerment.

For women owned micro-enterprises to graduate to small enterprise they need operate under supportive environment that encourages them "to go for it'. Woman in micro- enterprises lack social and cultural support in their role as entrepreneurs they are subject to stereotypes and have few visible role models. They need access to a full range of financial and non-financial support services, (Steven and Onge 2006). According to McCormick, (2001) there is a great significance differences in the performance of women owned enterprises vis -a -vis those of men. Their enterprises are smaller, less profitable and begin with less capital investment than those owned by men. Not only is there great deal of genders segregation by the sector where women mainly dominate enterprises such as food processing, hairdressing, dressmaking and retail of second hand clothing. Men are more dominate in metalwork, carpentry, vehicle repairs, shoe making, constructions and transport.

According to the world vision, (World Bank.2009), female led enterprises tend to be undercapitalized, have poorer access to machinery, fertilizer extension information and credit than male-led enterprises which hurts women ability to participate in development and contribute to higher living standards for their families. Women led micro- enterprises make significant contribution to the Kenyan economy especially in Agriculture and the informal sector while men tend to dominate formal sector. More than 75% of women live in rural areas (ILO, 2004) where they dominate the agricultural sectors such as floriculture, tea, coffee, vegetable, cereals and poultry.

Of the 1.9 million people who work in the informal economy, is a group of people who are not represented in the MSB sector statistic. Among these "invisible workers" are a number of women who operate micro-enterprises from their home base. The 1999 Baseline survey estimated that as many as 75 percent of these "invisible workers" are women in service who run the unregistered enterprises hence influencing there graduation to the next level. These businesses account for about 20% of Kenya's GDP. According to gender and economic growth assessment in Kenya (Ellis and Jozefina2007) women make a large, although frequently unseen contribution to the country's economy particularly in the informal business sectors.

Women operating micro- enterprises in Kenya are stigmatized (Robin son, 2005). Even those who succeed are still viewed negatively because the society does not expect women to be successful without assistance from men. There is need to cultivate an entrepreneurial culture in the Country as a whole. In Kenya, the entrepreneurial culture is weak. Unlike in the developed countries where one is recognized for trying and failing, the Kenya culture looks at failure negatively and not as an opportunity to improve. The graduation of any enterprise would translate to a wide improved living conditions hence helping in poverty reduction (MDG 2) more jobs would be created and women would be more empowered as well as the community they live in.

1.2 Statement of the Problem

Although the government of Kenya can be credited for implementing some of its Policies in favour of women, more still need to be done. The introduction of free Primary education in 2002 which is a response to one of the United Nations Millennium Development Goals, (UNMDG) enabled many initially excluded groups of children to access education. The introduction of the National Commission on Gender and Development which has a task of coordinating and facilitating the implementation of Gender mainstreaming is a positive move.

However, more need to be done especially in sectors such as financial accessibility, appropriate training, women's multiple responsibilities, and access to appropriate technology as well as acquisition of business skills. The researcher investigated factors that influence the graduation of women-owned micro-enterprises to small enterprises, which is important if the Government is to achieve the millennium development goals, such as eradication of extreme poverty and hunger (MDG 1), Millennium Development Goals (United Nations,2008). In the Government's pursuit to realize the millennium development goals, the inclusion of women and their contribution in economic development is paramont.

Women-owned Micro- enterprises are barely surviving to meet the basic needs hence the need to aggressively address their challenges (Gakure, 2003). The research was built on previous work documenting the challenges which women- owned enterprise faced and also highlighted on the methods by which such challenges can be overcome. Many women in micro-owned enterprises do not view their enterprises as viable and feasible employment options. (Ellis 2007). The main purpose of promoting women in micro-enterprises is to motivate them to pursue entrepreneurship as a viable and feasible option. Graduation of an enterprise can be measured by the number of employees it has, acquisition of additional space, adaptation of modern technology, and an increase in consumer base. Women-Owned Micro-enterprises in Nyeri Town do not exhibit these characteristics hence the researcher saw the need to investigate factors that influence their graduation.

1.3The purpose of the Study

The purpose of this study was to investigate factors that influence the graduation of women- owned micro-enterprises to small enterprises with specific focus on enterprises ran by women within Nyeri town. The researcher intended to investigate why many women are 'stuck' running micro-enterprises in the informal sector.

1.4 The Objectives of the Study

The objectives of the study included:

I. To determine how accessibility to finance affects the graduation of women-owned micro Enterprises to small enterprises.
II. To investigate how women in the micro- enterprises are affected by their multiple responsibilities.
III. To examine the contribution of business skills and their effect on the graduation of Women-owned micro-enterprises to small enterprises
IV. To investigate the contribution of training on the graduation of women Owned micro- enterprises to small enterprises
V. To investigate the contribution of technology to the graduation of Women owned micro- enterprises to small-enterprises.

1.5 Research Hypothesis

The researcher used the null and the alternative hypothesis.

1.5.1 Null /Alternative Hypothesis

I. Ho: Accessing finance and credit does not significantly affect the graduation of women owned -micro enterprises to small enterprise.

Hi: Accessing finance and credit to women-owned micro enterprises significantly affects the graduation of their enterprises from micro to small enterprises.

II. Ho: Women' s multiple responsibilities do not significantly affect the graduation of their enterprises from micro to small.

Hi: Women's multiple responsibilities affect the graduation of their enterprises from Micro to small significantly.

III. Ho: Lack of business skills does not affect the graduation of women owned micro enterprises to small significantly

Hi; Lack of business skills effects the graduation of women-owned micro- Enterprises to small enterprises significantly.

IV. Ho Education and training does not effect the graduation of women owned micro- enterprise to small enterprise

Hi: Education and training effects the graduation of women- owned micro enterprise to small enterprises.

V. Ho: There is no significant relationship between usages of modem technology and the graduation of women-owned enterprises from micro to small enterprises

Hi: There is a significant relationship between usages of modem technology and the graduation of women-owned enterprises from micro to small enterprises.

1.6 Significance of the Study

The information gathered in this research will educate women in micro enterprises on how they can facilitate the graduation of their enterprises as they learn how to overcome the challenges they face as women entrepreneurs. The information will also be useful to the Government and an eye opener to different ministries as they identify the areas to improve on in order to improve the performance of Women-owned Micro enterprises which contributes more than 50% of the Country's GDP. The study identified areas of need to ensure success of Women-owned Micro-enterprises. Financial Institutions will also benefit as they realize the need to offer advisory services and support to women-owned enterprises. It will also form a base on which others can develop their studies.

1.7 Research Scope

Nyeri town is about 180 km north of the capital city Nairobi. It lies at the Eastern base of the Aberdare range and on the western side of Mt. Kenya. Until the official formulation of counties, Nyeri town will remain the administrative headquarters of central province. According to information available in the municipal council's revenue office, Nyeri town has more than 300 micro and small enterprises; the town has about 10 banks, 105 beauty salons, 12 Insurance companies and various hotels and restaurants. The scope of the study was the women-owned micro enterprises within Nyeri town. The micro enterprises owned by women were selected due to proximity. The researcher's choice of Nyeri town was due to familiarity with the area which will ease data collection.

1.8 Assumptions

The research was based on assumption that the respondents were open and sincere with information. It was also based on the assumption that the respondents were aware of the factors that influence the graduation of their enterprise and that they are willing to graduate their enterprises if these factors are overcome. Another assumption was that the factors identified were similar to all other women-owned enterprises nationwide.

1.9: Definition of Terms

1.9.1 Micro- enterprises: Are enterprises ranging between 1-9 workers: they are found in both formal and informal.

1.9.2 Small enterprises: These are enterprises that employ between 10-49 workers are found in format and informal sectors.

1.9.3 Entrepreneurs: A person who attempts to organize resources in a new and more valuable way and accepts full responsibility.

1.9.4 Culture: Totality of socially transmitted behaviour patterns, arts, beliefs, Institution and all other products of human work and thought.

1.9.5 Graduation: Investing in time and capital to help people improve businesses, improvement in income generating activities.

1.9.6 Gender ; Socially constructed roles, relationships, and learned behaviour between male and female.

1.9.7 Mentor : Transfer of knowledge and skills.

1.9.8 MFJ: (Micro-Finance Institutions): Refers to variety of institutions that are involved in micro-credit and micro-savings.

1.9.9 Enterprise: A commercial activity engaged in as a means of livelihood or Profit.

1.9.10 Collateral: Assets pledged by a borrower to secure a loan or other credit subject to seizure in the event of default.

1.9.11 Technology: A social construction, application of organized knowledge to Practical tasks by ordered systems of people and machines.


2.1 Introduction

This chapter has covered the theoretical review, International trends, employment, finance, raw material, centres of excellence, property ownership, economic theory, psychological trait theory, social cultural theory, empirical review, conceptual framework, financial accessibility, technology, and the operational management.

2.2 Theoretical Review

The term Entrepreneurship has been defined differently by different scholars. It is the attempt to create value through recognition of business opportunity, management to risk-taking appropriate to the opportunity, through the communicative and management skills to mobilize human, financial and Janitorial resources necessary to bring a project to fruition. (John Kao, 1984). It is the purposeful activity of an individual or a group of associated individuals undertaken to initiate, maintain or aggrandize profit by production or distribution of economic goods and services (Cole, 1959). Entrepreneurship is based on purposeful and systematic innovation (Schumpeter, 1949).

2.2.1 International Trends

The contribution of women in micro enterprise in employment, growth and sustainability has been internationally acknowledged. In Australia, there are estimated 2.2 million businesses of which over 98 percent micro-and small enterprises with less than 40,000 medium and large companies. In New Zealand, MSES total 287,000 representing 97 percent of the total employment (Robert et al 2008).

2.2.2 Employment

Micro and small enterprises are the most prolific sources of employment in many countries. In Kenya they are prevalent in every corner and have great potential of creating a variety of jobs and income generating Sessional paper No 2. 2005, (Gok 2005)

2.2.3 Finance

Finance is regarded as the "life blood "of any enterprise. Women-owned enterprises suffer from lack of funds on the account that they do not have assets registered under their names hence they can not access funds from formal financial institutions. Financial Institutions consider women-owned enterprises less credit worthy due to the fear that they can leave their enterprises at any time. Women running Micro- enterprises are therefore left to use their personal savings to start and even run their enterprises (Khanka, 2008).

The need for capital during the early months of the new venture can become one of the most critical factors in keeping a micro-business alive. The ability and opportunities of starting up a micro-enterprise usually varies depending on the form of business the individual wants to start. (Hisrich, and Shepherd 2008).Women in micro-enterprises have always singled out access to finances as the biggest constraints preventing their businesses from graduating. Sessional paper, (Gok, 2005). The main institution that offer credit and especially to women is Kenya Women Finance Trust, Kenya Rural Entrepreneurship Programme, and United Women's Savings and Credit Co-operative Society and the National Association of Self- Employed Women of Kenya, Faulu Kenya among others. However, these institutions want in many areas, for instance besides being allocated in the urban areas, they do not assist women to vertically expand their businesses beyond the micro level (Gok, 2007). Lending Institutions attach their lending to collateral and this is disadvantageous to many women running micro-enterprises, for instance, in the Agricultural sector, women provide 70% of labour and only 1% has registered lands and 5-6% has titles in joint venture. Sessional Paper 2,(Gok '2005) it means therefore, that majority of them lack collateral that they can use to convince the lending institutions to fund them as many of the family collateral is registered under the husband's name. Despite the fact that MFIs have increased in number, there outreach is constrained especially in the rural areas because of their limited resource base and lack of institutional capacity to provide a wide range of financial services this is to according Draft Sessional paper,2003, (Gok, 2004).

2.2.4 Raw Material

Most of women-owned enterprises are plagued by the scarcity of raw material and necessary inputs. The cost of raw material is usually high and getting the raw material at a discount is usually difficult. The failure of many co- operatives in 1971 who were engaged in basket- making is an example of how lack of raw material sounds the death-knell of enterprises run by women as stated by Gupta (1992).

2.2.5 Centers of Excellence

In the Government's effort to achieve vision 2030, there are plans to set up excellence centres for the successful micro-enterprises to promote transfer of technology, capacity building and market for MSES products. The Government plans on building these centers in every province- Empowering women -owned micro enterprises economically and socially is important if these goals are to be achieved National Development and Vision 2030.

2.2.6 Property Ownership

The already passed Kenyan Constitution Article 70 and 82(1) gives equal rights to opportunities in political, social and economic activities for men and women in the bill of rights section as well as equal right to inherit and own property as stated in the new Kenyan Constitution (Gok, 2010). There is hope therefore that if the constitution is implemented to the latter, women will be able to use collateral to access funds. Women in micro- enterprises have the potential to move into the 'Economic grid' but they need support, encouragement, visibility, and economic encouragement (Lois, 2006).

According the International Finance Corporation's, voices of women entrepreneurs, (IFC, 2006), women who have been able to break the traditional barriers and their enterprise have graduated from micro to small and even to medium they include Mary Okello, owner and founder of makini schools, Esther Passaris, founder of adopt a light, Tabitha Karanja of Keroche Industries, Winnie Gitau, founder and president of pure Health products and

Mary Mwangi, the owner of double "M" transport. Common characteristics of these successful entrepreneurs is that they are well travelled, have high Education, they have accommodated modem technology, and have ability to access funds either on their own or through their husbands.

2.2.7 Economic Theory

The economic theory argues that the entrepreneurial activity originates from the surrounding economic environment. According to this theory, an entrepreneur is a person who brings together the resources or factors of production into combination that makes their value better than before. Adam Smith, the advocates of this theory in his book ‘An Inquiry into the nature and causes of the wealth of Nations; argues that an entrepreneur is an economic agent and an innovator who brings about new product and production processes (Smith1776).

According to this theory, it can be argued that women who start micro-enterprises should also be able to combine other factors of productions, such as land and capital in order to succeed. There could be a possibility that some women get engaged with entrepreneurial activities without focusing on other production factors.

2.2.8 Psychological Trait Theory

Psychological theory argues that entrepreneurs have unique values attitudes and needs that drive them. It argues that personality traits are the main determinants of entrepreneurial behaviour. The argument is that people are likely to become entrepreneurs either because of their hereditary or biological relations. This theory argues that entrepreneurs are likely to be influenced by their longing for independence. The need for achievement is the first in the personality trait that brings about entrepreneurship affiliation and has a desire to take personal responsibility to invest and manage a business. (McClelland, 1996). The Psychological trait theory associates people with high need for achievement to people whose parents had set high standards for them while they were children. It can therefore be argued, according to this theory that entrepreneurs are 'born' and not 'made'. The contradicting factor here is that the environment also influences a person's behaviour hence women in micro-enterprise could have ventured in either due to environmental influence or as a result of inherent traits.

2.2.9 Social-Cultural Theory

This theory maintains that social and cultural factors are the main factors for a person to exhibit entrepreneurial skills. These social aspects include family, peers, education, work experience and even role models. For a person to become an entrepreneur, he/she must have had an association with people who were entrepreneurs or who had entrepreneurial traits. This is even more evident if the person was a close relative or more so, a parent. This linkage provides a social support which is critical in business development (Kent 1981). According to this Theory, women running micro-enterprises could have landed there as a result of influence from friends or relatives meaning they are bound not to succeed if they never became entrepreneurs out of their own initiative. The researcher’s input in these theories is that they are all important in contributing to the graduation of women owned enterprises. They however need not to be considered independently but collectively because each one has a different contribution from the other hence the need to be collectively considered.

2.3 Empirical Review

In Africa, women are a powerful force for growth and development, making important contributions to the economy as workers and as entrepreneur to the welfare of their families (World Bank, 2004): however, this is achieved under significant constraints which greatly inhibit the realization of their full potential. Since women constitute the bulk of players in micro and small enterprise, it is important to include their interest in policy formulation and appreciate their contribution in economic growth through creation of an enabling environment. According to studies carried out by Ellis and Jozefina (2007), there's a growing recognition internationally that gender mainstreaming is good for economic growth and essential for poverty reduction.

In the study Gender and Economic Growth Assessment in Kenya (Ellis and Jozefina 2007), Eliminating gender based inequalities in education and accessing Agricultural inputs in Kenya could result in one of the increase in as much as 4.3 percentage points in GDP growth and a sustained year on year increase 2.0 to 3.5 percentage in growth. There is need to have a coherent micro-enterprise development which take into account the three dimensions of an enterprise in their start-up, survival and growth stage.

According to the International labour organization (ILO, 2006), no economically successful

Country can run using less than half of its business resources. Women in Kenya make up half of their business force yet their contribution have not been adequately nurtured. Access to finance is commonly seen as a major limitation for graduation of women-led micro- enterprises. Despite the fact that Kenya has one of the most diverse financial systems in the sub-Saharan Africa, (Comprising of 41 commercial Banks: many insurance companies and credit cooperatives (SACCOS), accessing funds is still ranked as a major constraints to investment after corruption (World Bank, 2005).

According to Financial Sector Deepening journal (2007), a well-delivered micro-finance Institution (MFI) is a great tool in poverty reduction, unfortunately, women business owners who have outgrown the maximum loan limits from microfinance institution have great difficulties obtaining as small as one million Kenya shillings from them, and according to the voices of women, (IFC 2006) Esther Passari notes "we can not all remain in micro-enterprises."

A case revealed by the Ministry of Trade and Industry where a loan was approved by women joint loan scheme at the Ministry but failed to materialize as the husband refused to pledge the family's land and title deed as collateral. Obtaining title deed as collateral to financial expansion is a handle for women entrepreneurs, given that property is not registered in their names (Kenya Gender and Economic Growth, (Ellis and Jozefina, 2007).

Mohammad Yunus, the founder of Grameen Bank in Bangladesh and the brain- child of micro-finance noted that women are better in loan repayment than men. Unfortunately, Kenya's lending institutions lack a credit referring system through which Women’s excellent track records in micro finance could be made available to other financing institutions. Since women's main asset is their credit history, the limited availability of basic credit information and lack of an information sharing system for banks impacts women entrepreneurs disproportionately, Institute of economic Affairs (Gok, 2008).

Equity bank initiated a Branch for women in micro enterprises in June 2007. Its main target constituted of community groups with a good history, and group members would act as guarantors. The bank would also undertake six weeks of training the new community groups. Despite this effort, women in micro enterprises do not take full advantage of these provisions since the bank would require a good group history yet majority of MSEs do not keep records due to their level of education and they don't avail themselves for training due to their multiple responsibilities.

Studies carried out by Ellis and Jozefina, (2007) reveals that the dual role played by women denies them adequate time to plan and manage their business leading to dismissal performance or closure of women-owned enterprises. The poor performance of women enterprises can be attributed to their multiple "role conflict". Alila et al (2002) acknowledges that the competing financial needs between family and the business are major constraints to graduation of micro enterprises owned by women. The little income earned from the business is at times used for what would appear to be an urgent family requirement regardless of the reason the money was kept aside. As a result there's reduction in capital invested hence curtailing the graduation of the enterprise. Studies carried out by Elson, (2008) points out that activities which make a living are recognized by economies as economic activities which in principle should be counted as part of National production. Feminist economies have pointed out that the unpaid, umarketed, caring activities are also critical for the functioning of the "productive economy" since they produce daily an intergenerational labour force which works in the productive economy USA1D (2005) notes that women in general have a labour burden (time poor) as opposed to men. Family and community responsibilities take a lot of their time that could otherwise be applied in improving their income generating activities. Women work 18 hours a day juggling in both productive work and their responsibilities at home. The childcare responsibilities limit their mobility and oblige them to generate income in a less conducive environment for business. The fact that there is shortage of affordable childcare facilities and pre-school programmes even in the urban areas does not make it better.

A World Bank study by Malmgerg (1994) cited in Grown, et al (2005), Women's multiple responsibilities is often cited as a reason for their low participation in skill training and literacy programmes which are critical for business building management skills of female enterprises. A study conducted in Ghana, Tanzania and Zambia revealed that women in Ghana spend up to 300 hours a year, 800 hours in Tanzania and Zambia collecting firewood.

Women and girls spend more time fetching water compared to men and boys. Water is an important ingredient in food process processing and other major household needs. Women who live in communities without infrastructures such as transport, water, sanitation and energy are the most affected. 87 percent of trips in rural areas take place on foot, on average in the rural areas; women carry an average of 20 kilograms of load for 1.4 to 5.3 kilometres. Improved infrastructure can therefore, translate into time saving hence an improvement in women's income.

Women concentration while working is reduced by multiple distractions which lead to further reduction in productivity and earning. The dual responsibility of women in micro- enterprises makes them risk-averse hence limiting their access to resources required for success of their business. Women in the micro- enterprises look at their business as a means to survive and often time to help them support their families, (Gordon, 2000). Some of the hours women are active are unrecognized and not remunerated. Barwa, (2003) on women entrepreneurs in Vietnam found that women face additional handicaps due to the prevailing social cultural and gender based inequalities and biases. In many parts of the world, girls are endangered species. In India, the high cost of dowry when girls marry discourages families from bringing up daughters. The state policy in China that recommends one child per family has generally seen couples favouring boys. In many parts of Africa, boys are still seen as the custodians of the family, clan or community heritage. They are supposed to carry the lineage.

World Bank on Country social analysis (World Bank, 2006) notes that, girls face a risk of sexual abuse on their way to and from school as well as on greater burden of domestic tasks compared with boys when they arrive home. The 2007 Kenya's General election campaign platform was described as male dominated; tough and intimidating for women candidates. The physical and psychological abuses can be viewed as demeaning and bringing the integrity of women to question so that the male opponents can have an advantage over them. Based on tile gendered social cultural norms and relationship between men and women determines their right to resources and the decision making power they have, Grown and Gupta (2005). The world summit (2005) Government of Africa and the international development organization reaffirmed their Commitment to gender mainstreaming and women's empowerment as essential to development of peace and security. Studies by the profiling women entrepreneurs (2007), shows that the social, cultural and traditional practices and unfounded norms deny women various opportunities to effectively participate in the production system. The African culture still regards the kitchen as the place of a woman besides rising up of children. This kind of socialization makes some men find it hard to fathom the idea of sharing the same platform with a woman. Women who work against this norm are considered to be breaking the rules that govern the gender roles. Due to the retrogressive cultural values, women have been victims of violence which has taken the form of domestic violence, emotional violence, rape, defilement and even incest, this behaviour greatly influence the participation of women in their enterprises as they usually get emotionally and physically affected thus affecting their performance in their enterprises.


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An investigation into the factors influencing the graduation of women-owned micro-enterprises
A survey of women-owned micro-enterprises in Nyeri Town - Kenya
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ISBN (Book)
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The two supervisors Mr. George Kimani and Mr. Micheal Kiama are co-authors of the document.
nyeri, town, kenya
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Tabitha Karanja (Author)George Kimani (Author)Michael Kiama (Author), 2011, An investigation into the factors influencing the graduation of women-owned micro-enterprises, Munich, GRIN Verlag,


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