FACTORS AFFECTING PERFORMANCE OF SMALL AND MEDIUM ENTEPRISES IN KENYA: A CASE STUDY OF GIKOMBA MARKET IN NAIROBI COUNTY

The role played by SMEs in both developed and developing countries is very important in terms of industrialization and economic growth. These SMEs help countries to grow and increase their per capita income; they also create employment opportunity, enhance regional economic balance through industrial distribution and promote utilization of resource that is critical for engineering growth and development. The study main objective was to establish factors affecting performance of small and medium enterprises in Kenya a case study of Gikomba market with specific objectives ; to establish how government regulations affects performance of small and medium business enterprises in Gikomba market; to determine how access to finance affects performance of small and medium business enterprises in Gikomba market; to establish how access to information affects performance of small and medium business enterprises in Gikomba market and to determine how business competition affects performance of small and medium business enterprises in Gikomba market. This study will thus make special contribution to the existing knowledge, address and provide the background information on performance of SMES in Gikomba market in Nairobi City County. It will also help scholars and individual researchers who intend to used this study as basis for conducting research in the same area to identify gaps. The results obtained from this study will generate insight that can assist programmes in developing effective strategies for addressing the challenges associated with upcoming entrepreneurs as well as inform future policy makers on ways of creating conducive environment for SMEs to thrive. The study was anchored on three theories namely Sociological Theory, Human capital theory and Empowerment theory. Descriptive research design was adopted for the study with the target population being 710 respondents that was selected randomly. Stratified proportion sampling was applied in order to get a suitable unit of representative of analysis. Questionnaires were administered as the main data collection tool. Questionnaires were pilot tested before being administered to the target audience. Analysis of data was done using descriptive statistics. Specifically, means, averages and percentages was used in the study. The data analysis tools were simple statistics and quantitative methods. The researcher concludes that government regulations affect performance of SMEs and the study also established that government regulations affects performance of SMEs. The study also established that accessibility to capital has led to improved business performance. The researcher concludes that access to information affects performance of small and medium business enterprises in Gikomba market to a great extent and also business competitions affect performance of small and medium enterprises to a very great extent. The study also established that the competition from business rival business affects performance. The researcher recommends that County government of Nairobi should consider having incentives for SMEs by organizing workshops, conferences and seminars that will improves SMEs management skills and updates them in new skills that are available in the market that will improve the performance