Small and Medium Enterprises in Kenya: The Case Study of Nairobi County

Greatest potentials in driving economies of the developing countries such as Kenya are within the Micro, Small and Medium Enterprises sector which account for almost over 90 % of the businesses in these countries. Information asymmetries however, raise the pricing of credit to MSMEs in developing countries and Kenya in particular as well as the high levels of informality within the sector and inadequate systems of collateral verification which hinder the lending. In this 21st century MSMEs should focus beyond bank financing to meet their capital structure needs if they are to fully realize growth and job-creation potential. Via a descriptive survey this study examined the influence of venture capital financing on the growth of Micro, Small and Medium Enterprises (MSMEs), with a focus on venture capital firms in Nairobi-Kenya that have financed MSMEs in the country. Findings indicated that indeed both the venture capital finances and the capitalist expertise were crucial in fast growth of the MSMEs. However information asymmetry gap need to be bridged so as to ensure that MSMEs get a fair operation ground in comparison with the other big players in the developing economies that they operate such as Kenya. This however requires better policies setting by governments so as to encourage the venture capitalist and business angels ’ environment. This study provides resource information on venture capital financing and its influences on growth of MSMEs that the government and other stakeholders need in generation o