Assessment of Entrepreneurship Practice in Kenya: A Case of Nairobi City Central Business District

A Project Report by Polo Philip Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Masters in Business Administration (MBA)The concept of entrepreneurship has attracted a greater interest in the recent years due to the socio-economic roles it plays in the contemporary society. Due to the heightened interest in the subject, scholars and researchers alike have devoted significant amount of time and resources in the study of the discipline. It is important to note that there is no doubt about the benefits arising from the practice of entrepreneurship, but scholars are yet to agree on a universal standard definition of the concept. The objective of the study was to assess entrepreneurship practice in Kenya in attempt to arbitrate on the contentious issues that previous research works on the subject have not been able to resolve. The three specific objectives were to explore factors that influence entrepreneurship in Kenya; to determine the challenges faced by entrepreneurs in Kenya; and to establish the strategies to mitigate against the challenges to entrepreneurship practice Kenya. The study identified key stakeholders who would benefit from the research findings as the prospective entrepreneurs, government policy makers, the financial institutions, the Kenya Federation of Employers, Researchers and Academicians. Chapter three outlines the research methodology that was adopted to guide the data collection and analysis processes. Due to the segmentation of the population of the study, stratified random sampling technique was adopted as the most appropriate research design to generate data for analysis across the various strata within the sampling frame of the target population. In addition, sampling design, data collection methods, research procedures and data analysis methods have been discussed. Thereafter, descriptive data analysis techniques were used to explain the types of relationships that exist between the variables of the study. The findings of the study presented in chapter four have been discussed in line with the specific objectives of the study that were outlined in chapter one. Age, gender, level of education, a previous business experience and employment history are the main demographic factors influencing the level of entrepreneurship within the geographical scope of the study. Economic factors influencing entrepreneurship were access to capital, technical skills, access to markets and suppliers; and clustering of similar enterprises within the area had significant influence on enterprises development. The family heritage, friends, ethnicity and role models comprised the main socio-cultural triggers that promote entrepreneurship in the CBD. The common challenges facing the enterprises were inability to access adequate operating capital and affordable credit facilities for business growth and expansion purposes. Dilapidated and poor road networks, unfavorable licensing and bureaucratic registration regimes, unfair taxation policies, inadequate or total lack of supply of business development support services and massive corruption in the processes were the other challenges hindering successful business operations within the CBD. To safeguard against the challenges faced by entrepreneurs in the CBD, majority of the respondents favored access to low interest credit and capital for business startups and expansion, improvement of the road network system for movement of people, factors of production, finished goods and the reduction of business operating costs. Relaxation of business licensing, registration and fair taxation policies were the other measures the respondents considered necessary for conducive business operations. Based on the results obtained, the study concluded that entrepreneurship in Kenya is highly influenced by demographic, economic and socio-cultural triggers. Inability to raise adequate financing for capital, unfavorable taxation, delays in licensing and registration need to be regulated further to offer favorable climate for enterprises development. Key recommendations from the study were provision of low interest credit facilities, improvement of the road network, relaxed business licensing and registration processes and fair taxation all of which are necessary for business enterprises startups and growth prospects