CHALLENGES FACING STRATEGIC SUSTAINABILITY OF MICRO

CHALLENGES FACING STRATEGIC SUSTAINABILITY OF MICRO, SMALL AND MEDIUM BUSINESS ENTERPRISES (MSMES) IN KENYA
A Study of Muthurwa Market in Nairobi County in Kenya

NAME: PETER MWAURA NJOGU

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ADM. NO.: N50/25365/2016

A Management Research Project Submitted in Partial Fulfillment of the Requirements for the Award of Degree of Master of Business Administration (Strategic Management-Option) of Presbyterian University of East Africa

2018
DeclarationThis research study is my original work and has not been presented to any other examination body for the award of Diploma certificate, Bachelors or Masters Degree.

NAME: PETER MWAURA NJOGU AD NO.: N50/25365/2016
Sign: ………………………………. Date: ……………………………….

Declaration by the supervisors
This proposal is submitted for examination with our approval as the university supervisor
at Presbyterian University of East Africa.
Supervisor
Name: Timothy Mwangi
Lecturer: School of Business
Presbyterian University of East Africa,
Sign: …………………………………. Date: ………………………….

Supervisor
Name: Professor Namwel BosireHead of Department: School of Business
Presbyterian University of East Africa
Sign: ………………………………… Date: ……………………………
DedicationI dedicate this research study to all entrepreneurs who have taken the risk of running businesses in the ever changing world of business.

AcknowledgementI would like to acknowledge the Almighty God for His sustenance. I am greatly indebted to my supervisors Professor Namwel Bosire and Mr Timothy Mwangi for their invaluable guidance and encouragement to make research project a reality.

I am also grateful to all my lecturers in the school of business for their undying support and guidance. Not forgetting my fellow MBA students and all staff in PUEA for their moral support, patience and guidance.

Table of contents TOC o “1-3” h z u Declaration PAGEREF _Toc516913617 h iiDedication PAGEREF _Toc516913618 h iiiAcknowledgement PAGEREF _Toc516913619 h ivTable of contents PAGEREF _Toc516913620 h vList of tables PAGEREF _Toc516913621 h xList of figures PAGEREF _Toc516913622 h xiList of abbreviations PAGEREF _Toc516913623 h xiiAbstract PAGEREF _Toc516913624 h xiiiCHAPTER ONE: INTRODUCTION PAGEREF _Toc516913625 h 11.0 Introduction PAGEREF _Toc516913626 h 11.1 Background of the study PAGEREF _Toc516913627 h 11.2 Statement of the problem PAGEREF _Toc516913628 h 61.3 Research objectives PAGEREF _Toc516913629 h 81.3.1 Major objective of the study PAGEREF _Toc516913630 h 81.3.2 Specific objectives PAGEREF _Toc516913631 h 81.4 Research questions PAGEREF _Toc516913632 h 81.5 Significance of the study PAGEREF _Toc516913633 h 91.6 Limitations of the study PAGEREF _Toc516913634 h 91.7 Scope of the study PAGEREF _Toc516913635 h 10CHAPTER TWO: LITERATURE REVIEW PAGEREF _Toc516913636 h 112.1 Introduction PAGEREF _Toc516913637 h 112.2 Theoretical reviews PAGEREF _Toc516913638 h 112.2.1 Resource Based View Theory PAGEREF _Toc516913639 h 112.2.1 The Technology Acceptance Model (TAM) PAGEREF _Toc516913640 h 122.2.3 Chaos Theory PAGEREF _Toc516913641 h 142.3 Empirical Review PAGEREF _Toc516913642 h 152.3.1 Finance PAGEREF _Toc516913643 h 152.3.2 Entrepreneurship PAGEREF _Toc516913644 h 182.3.3 Technological Development and MSMEs PAGEREF _Toc516913645 h 192.3.4 Government policy PAGEREF _Toc516913646 h 232.4.1 Finance PAGEREF _Toc516913647 h 272.4.2 Entrepreneurship PAGEREF _Toc516913648 h 272.4.3 Technology PAGEREF _Toc516913649 h 272.4.4 Government Policy PAGEREF _Toc516913650 h 272.3 Critical review PAGEREF _Toc516913651 h 282.4 Summary PAGEREF _Toc516913652 h 29CHAPTER THREE: RESEARCH METHODOLOGY PAGEREF _Toc516913653 h 303.1 Introduction PAGEREF _Toc516913654 h 303.2 Research Design PAGEREF _Toc516913655 h 303.3 Target Population PAGEREF _Toc516913656 h 303.4 Sampling PAGEREF _Toc516913657 h 313.4.1 Sample Design PAGEREF _Toc516913658 h 313.4.2 Sample Size PAGEREF _Toc516913659 h 323.5 Data Collection Instrument and Procedure PAGEREF _Toc516913660 h 323.5.1 Questionnaires PAGEREF _Toc516913661 h 323.5.2 Data Collection Procedure PAGEREF _Toc516913662 h 333.6 Pilot Test PAGEREF _Toc516913663 h 333.7.1 Validity of the Instrument PAGEREF _Toc516913664 h 343.7.2 Reliability of the Instrument PAGEREF _Toc516913665 h 343.8 Data Presentation and Analysis PAGEREF _Toc516913666 h 353.9 Ethical Consideration. PAGEREF _Toc516913667 h 36CHAPTER FOUR: DATA ANALYSIS AND PRESENTATION PAGEREF _Toc516913668 h 374.1 Introduction PAGEREF _Toc516913669 h 374.2 Response Rate PAGEREF _Toc516913670 h 374.3 Background Information PAGEREF _Toc516913671 h 384.3.1 Demographic Information PAGEREF _Toc516913673 h 384.3.2 Businesses trader conduct at Muthurwa market PAGEREF _Toc516913675 h 394.3.3 Age Distribution of MMSEs traders in Muthurwa market in Nairobi PAGEREF _Toc516913677 h 394.3.4 The highest level of education attained PAGEREF _Toc516913678 h 404.3.5 Period of time in years trading in Muthurwa market PAGEREF _Toc516913680 h 414.3.6 Number of employees employed by traders in Muthurwa market PAGEREF _Toc516913681 h 424.4 Challenges facing strategic sustainability of MSMEs in Kenya PAGEREF _Toc516913682 h 434.4.1 The extent that the following factors affect strategic sustainability of MSMEs in Muthurwa market PAGEREF _Toc516913684 h 444.4.2 Extent to which finances affected the strategic sustainability of MSMEs in Muthurwa market PAGEREF _Toc516913685 h 454.5 Technological development and strategic sustainability of MSMEs in Muthurwa market. PAGEREF _Toc516913687 h 464.5.1 The level to which technology important in performing the following tasks in your business PAGEREF _Toc516913688 h 464.5.2 The extent technological development challenges the strategic sustainability of the business PAGEREF _Toc516913689 h 474.6 Entrepreneurial Knowledge and Skills and strategic sustainability of MSMEs in Muthurwa Market Nairobi PAGEREF _Toc516913690 h 484.6.1 Formally trained on entrepreneurship knowledge and skills PAGEREF _Toc516913691 h 484.6.2 Extent entrepreneurial knowledge and skills challenges strategic sustainability of the business in Muthurwa market PAGEREF _Toc516913692 h 494.7 Government assistance and strategic sustainability of MSMEs PAGEREF _Toc516913693 h 504.7.1 Extent of Government assist strategic sustainability of MSEs in Muthurwa market in Nairobi Kenya PAGEREF _Toc516913694 h 504.7.2 Effects of government activities, policies, laws and regulation in strategic sustainability of MSMEs in Muthurwa market. PAGEREF _Toc516913695 h 514.8 Other factors affect the strategic sustainability of business in Muthurwa market. PAGEREF _Toc516913696 h 524.9 Inferential Statistics PAGEREF _Toc516913697 h 534.9.1 Pearson Correlation Analysis PAGEREF _Toc516913698 h 534.9.2 Regression Analysis PAGEREF _Toc516913699 h 554.9.3 Coefficients PAGEREF _Toc516913700 h 564.7 Summary of the Chapter PAGEREF _Toc516913701 h 57CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION PAGEREF _Toc516913702 h 585.1 Introduction PAGEREF _Toc516913703 h 585.2 Summary of the study PAGEREF _Toc516913704 h 585.2.1 Background information PAGEREF _Toc516913705 h 585.2.2 Extent to which inadequate finances affect strategic sustainability of MSMEs in Kenya. PAGEREF _Toc516913706 h 595.2.3 Effects of technology on strategic sustainability of MSMEs in Kenya. PAGEREF _Toc516913707 h 605.2.4 Extent entrepreneurial skills challenges strategic sustainability of MSMEs in Kenya. PAGEREF _Toc516913708 h 615.2.5 Impact of government policies on strategic sustainability of MSMEs in Kenya PAGEREF _Toc516913709 h 615.3 Conclusion of the study PAGEREF _Toc516913710 h 625.3.1 Background information PAGEREF _Toc516913711 h 625.3.2 Extent to which availability of finance affects strategic sustainability of MSMEs in Kenya. PAGEREF _Toc516913712 h 635.3.3 Effects of technology on strategic sustainability of MSMEs in Kenya. PAGEREF _Toc516913713 h 635.3.4 Extent entrepreneurial skills challenges strategic sustainability of MSMEs in Kenya. PAGEREF _Toc516913714 h 645.3.5 Impact of government policies on strategic sustainability of MSMEs in Kenya PAGEREF _Toc516913715 h 645.4 Recommendation of the study PAGEREF _Toc516913716 h 655.5 Limitation of the study PAGEREF _Toc516913717 h 675.6 Recommendation for further studies PAGEREF _Toc516913718 h 67References PAGEREF _Toc516913719 h 68APPENDIX I – Letter of introduction PAGEREF _Toc516913720 h 73APPENDIX 2: Questionnaire PAGEREF _Toc516913721 h 74APPENDIX 3: Budget PAGEREF _Toc516913722 h 82APPENDIX 4: Work plan PAGEREF _Toc516913724 h 83
List of tables TOC h z c “Table” Table 1 Target population PAGEREF _Toc516913740 h 31Table 2 Sample population PAGEREF _Toc516913741 h 32Table 3 Number of respondents PAGEREF _Toc516913742 h 37Table 4.2 Demographic information PAGEREF _Toc516913743 h 38Table 5 Business trader conduct at Muthurwa market PAGEREF _Toc516913744 h 39Table 6 Age Distribution of traders in Muthurwa market PAGEREF _Toc516913745 h 40Table 7 Highest Education Level PAGEREF _Toc516913746 h 41Table 8 Period trading in Muthurwa market PAGEREF _Toc516913747 h 42Table 9 Number of employees employed by traders in Muthurwa market PAGEREF _Toc516913748 h 43Table 10 Challenges facing strategic sustainability of MSMEs in Kenya PAGEREF _Toc516913749 h 44Table 11 The extent factors affect strategic sustainability of MSMEs in Muthurwa market PAGEREF _Toc516913750 h 44Table 12 Extent to which finances affected the strategic sustainability of MSMEs in Muthurwa market PAGEREF _Toc516913751 h 45Table 13 Electronic gadget(s) that MSMEs traders to access technology PAGEREF _Toc516913752 h 46Table 14 The use of technology in MSMEs PAGEREF _Toc516913753 h 47Table 15 Extent technological development challenges the strategic sustainability of the MSMEs in Muthurwa market. PAGEREF _Toc516913754 h 48Table 16 Formal training on entrepreneurial knowledge and skills PAGEREF _Toc516913755 h 49Table 17 Extent entrepreneurial knowledge and skills challenges strategic sustainability of the business PAGEREF _Toc516913756 h 49Table 18 Government assistance of MSMEs PAGEREF _Toc516913757 h 50Table 19 Effect of Government policy on strategic sustainability MSMEs in Muthurwa market. PAGEREF _Toc516913758 h 52Table 20 Correlations PAGEREF _Toc516913759 h 54Table 21 Model Summary PAGEREF _Toc516913760 h 55Table 22 Coefficients PAGEREF _Toc516913761 h 56List of figures TOC h z c “Figure” Figure 2.1 Conceptual Framework PAGEREF _Toc516913762 h 26List of abbreviationsMSMES – Micro, Small and Medium Business Enterprise
SMEs – Small and Medium Eterprises
GDP – Growth Domestic Product
SPSS – Statistical Package for the Social Sciences
TAM – Technology Acceptance Model
FSD – Financial Sector Deepening
CBK- Central Bank of Kenya
RBV – Resource Based View Theory
SD- Standard Deviation
Definition of common terms
Capital- These are resources used to start and sustain the business. Capital includes finances, land, premises, plant, machinery, raw materials among others.

Entrepreneurship skills: the ability to plan, mobilize, organize and control all the factors of production in the right proportion to produce, distribute or sell the products more effectively and efficiently.

Medium enterprises: Refers to any business enterprise employing between 50-99 people. It annual turnover is between KES 5 million and 800 million.

Micro enterprise: Refers to any business organization with a maximum annual turnover of KES 500,000 and less than 10 employees.
Micro, small and medium enterprises: refers to Small and Medium Enterprises
Small enterprises: Refers to any business business enterprise with annual turnover between KES 500,000 and 5 million annual turnovers and employ 10-49 people.
Solvency: The ability of the business to pay for its recurrent expenditure using available liquid resources, without necessarily disposing off some of its fixed assets.

Strategic sustenance: the ability of the business to continue with its operations seamlessly, overcoming all hurdles in the market and in dynamic turbulent business environment.

Working capital: financial resources in the organization that assist the entrepreneur in day-to-day running of the business. It indicates the liquidity of the business.

AbstractThe study was to investigate challenges facing strategic sustainability of micro, small and medium business enterprises (MSMES) in Kenya; case of Muthurwa market in Nairobi County in Kenya. It was guided by the following objectives; to evaluate the extent to which availability of finance, technological development, and lack of adequate entrepreneurial skills government policies and laws challenges strategic sustainability of MSMEs in Kenya. Descriptive research design was adopted in this study. This study targeted 743 business people operating in Muthurwa Market in Nairobi. The sample 248 respondents were selected using multistage sampling method. The businesses were classified into various strata depending on their operations. 20% of the target population on each stratum was sampled. Simple random sampling using random numbers were used to select the respondent from each stratum. The data was collected using questionnaires which had both closed and open ended questions. The data collected was analyzed by use of the Statistical Package for Social Sciences (SPSS) program. Quantitative methods like mean, percentages, frequencies and standard deviation were used to describe the findings while inferential statistics like correlation analysis, regression and ANOVA were used to establish relationships between the independent and dependent variables and the suitability of the model. The findings were presented in frequency tables, charts and graphs. The study found that for any MSME in Kenya to survive, it should have adequate capital. MSMEs should be encouraged to acquire entrepreneurial knowledge and skills from established institutions and experienced professionals. The study also found the cost of acquiring of electronic gadgets, cost and the knowledge of using was the major deterrents despite the traders having knowledge of usefulness of technology in running the business. The study recommended the government should train the MSMEs traders on entrepreneurial knowledge and skills as well as enable them acquire basic technological skills of promoting their products and operating their businesses. The study also recommended national and county government should provide a conducive business atmosphere for MSMEs to thrive. It should lower or waive licensing fee and provide for essential services. The national government should also lower the customs it levies on MSMEs traders who import their wares from abroad and reduce bottlenecks and bureaucracy associated with the same.

CHAPTER ONE: INTRODUCTION1.0 Introduction
This section constitutes the background of the study, the profile of the Muthurwa market, the statement of problem, objectives of the study, research questions, significance, scope of the study and the definition of terms used in the study.
1.1 Background of the studySmall and Medium enterprises popularly known as SMEs are engines of growth, vital to most economies. World Economic survey session paper 2015 conducted by world bank, suggests that MSMEs account for 95 percent of firms in most countries, create jobs, contribute to GDP, aid industrial development, satisfy local demand for services, innovate and support large firms with inputs and services. In Africa, SMEs create 80 percent of employment, establishes a new middle class and stimulates the demand for new goods and services.
According Kenya Central Bureau of Statistics (2017) SMEs play a key role in economic development and job creation. In 2016, 82% of jobs created were dominated by SMEs. The term micro and small enterprises (MSEs) or micro, small and medium enterprises (MSMEs), is used to refer to SMEs in Kenya. Under the Micro and Small Enterprise Act of 2012, micro enterprises have a maximum annual turnover of KES 500,000 and employ less than 10 people. Small enterprises have between KES 500,000 and 5 million annual turnovers and employ 10-49 people. Medium enterprises are not covered under the act, but have been reported as comprising of enterprises with a turnover of between KES 5 million and 800 million and employing 50-99 employees. Most SMEs fall under the informal sector and by extension, the term informal refers to people in self-employment or small-scale industries. The informal sector is estimated to constitute 98 percent of business in Kenya, contributing 30 percent of jobs and 3 percent of Kenya’s GDP. The government recognizes the role of the informal sector and seeks ways to integrate these businesses into the formal sector. Humphrey, K. (2006) noted Kenya does not have a comprehensive record of SMEs. While report from Kenya Management Assistance programme (2015) estimates put Kenya’s MSMEs at about 7.5 million enterprises, contributing approximately 44% to the Kenyan GDP in 2016.Despite the fundamental role SME’s play in the Kenyan economy, these enterprises are not able to operate to their optimum level due to the challenges they face.

Ongile, G. (2011), notes the growth and strategic strategic sustainability of most SMEs in Kenyan are hindered by inadequate capital. Naituli, G Wagulo, F and Kaimenyi, B (2010), suggested the problem is further aggregated by their inability to access loans and credit facilities from financial institutions such as commercial banks due to lack of collateral security. Kuto, L.Y.(2003), observed that despite improved involvement of Kenyan banks in funding SMEs as compared to many to other sub-Saharan African countries, Kenyan SMEs continue to face challenges related to financing. The government of Kenya with conjunction with World Bank and Bill Gates foundation has established programmes such as Kenya’s Financial Sector Deepening (FSD) aiming to expand financial services accessibility among lower-income households and small enterprises. According to Isabel M. I. (2000), approximately 61% of small businesses considers funding and retaining qualified workers as the most significant challenge to the growth or survival of their business. He also highlighted other major concern especially in United Kingdom as state and federal regulations, economic uncertainty, keeping up with technology and access to adequate capital.
Research conducted by CBK and World Bank in 2015, the World Bank and Central Bank highlighted the difficulty in tracking the size of the SME market and its need for financial services; as they attempted to identify the size of demand and supply side of finances in SMEs sector. The research showed the supply side of SME finance, which evolved between 2009 and 2013, had greatly expanded Kenya’s financial sector. Ondego, G. (2007) suggested for Kenya to fulfill its desire to achieve vision 2030, SME lending must be improved further and increased. Studies conducted on FSD programmes in 2016 on Kenya’s financial services sector to SMEs revealed banks were not serving SMEs effectively.

According to Kenya Management Assistance programme (2015), SMEs growth can be sustained through improved funding by financial institutions, as well as reducing the cost of credit. This should be accompanied by developing more innovative finance products such as factoring and leasing as well as by adopting more efficient collateral registration processes.
According to Jim, B (2013), lack of adequate knowledge, skills and managerial training among entrepreneurs establishing MSMEs was cited to greatest hindrance in sustenance of SMEs in Kenya today. According to Sessional Paper No. 2 (2015), most people gets into the business with vision of making livelihood but lacks basic skills to run them. He further argued that lack of proper mentorship coupled with ignorance have led to downfall of various SMEs in Kenya. Enyinna, C, and Carl, L.( 1999), noted more often than not small and medium enterprises establish managerial strategies through trial and error mechanism. Their managerial techniques only focus on operational plans rather than strategic plans of their organization which are basically short term as opposed to long term. In addition, these managerial techniques are intuitive and not standardized with those of other global entrepreneurs. Hence they are not able to adequately handle challenges facing enterprises.

Longnecker J, (2000) suggested that technology is the major drive of change in the world today. It have led to introduction of new products, new processes of conducting business, shortened the product lifecycle as well as improved communication. According to the study conducted by Naituli, G Wagulo, F and Kaimenyi, B (2010), changes in technology change poses a big challenge to the growth of businesses in Kenya today. Many firms are unable to adopt new technology due to cost involved; that is the initial, installation and maintaince costs. Further noted technology may more often than not fit the needs of these enterprises. For instance, a small enterprise located in a rural area cannot reap the full benefits of internet connection due to lack of rural electrification and poor internet connectivity.
National government through legislative organ, County government and other stakeholders continue to introduce new regulations for industries and enterprises in Kenya. New laws are being enacted in a bid to regulate the operations of enterprises, protect public interest as well as spearhead sustainable economic growth in the country (Riyanti, P.B (2014)).

However, such regulations sometimes pose tremendous threat to the growth of small and medium enterprises in Kenya since some are too punitive and tough. Ban to use of plastic bags in 2017 adversely affected many businesses since the government did not provide alternative and relatively affordable method of packaging. Other challenges facing small and medium enterprises as identified by Gelderen V. and Frese M. (1998), included poor infrastructure, poor management of resources and inadequate support from the government. They further argued Small and a medium enterprises serve as backbone of any economy especially in Sub Saharan Africa hence the government should intervene and help these enterprises gain momentum.

Kenya has not ripped all the benefits that can be accrued through integration and skills development of its large, yet unproductive informal sector (Gelderen V. and Frese M. (1998)). Fortunately, the architects of Vision 2030 acknowledge the significance and need to support the informal sector to increase jobs, productivity and income distribution, and public revenues. Vision 2030, the country’s development blueprint to transform Kenya into a newly industrializing middle-income country, aims at increasing and improving SMEs establishments. More than supporting the informal sector, the country hopes to accelerate economic growth by increasing jog creation ventures, improving laws that govern business practices, institutional reforms, improving infrastructure and reducing energy costs. The government is currently involved in developing and implementing a conducive environment for businesses to be established and grow (Ondego, G. (2007)).

Muthurwa market is twelve hectare market complex owned by Nairobi County Authority. The market is located in the central business district area in Nairobi, Kenya close to Railways headquarters. The market was construction at a cost of 800 Kenya shillings. Construction work started in 2006 and lasted for about 1 year. It was officially opened on February 2008. The plan included a 24-hour market with basic facilities like water, restrooms, lighting, a hospital, a police station, multi-storied stalls, a banking hall and an administration office. The major objective of its construction was to control hawking and traffic congestion in Nairobi CBD. It hosts several activities including a business activities and a terminus of almost all matatus heading to the Eastlands area of Nairobi. Business activities done at Muthurwa market includes but not limited to boutiques selling new and Second hand clothes and shoes; grocery shops dealing with agricultural products such as Fruits, Vegetables, Bananas, Potatoes, Beans, Maize and maize flour, Millet and millet flour, Cassava and Cassava flour, Spices, Groundnuts and Rice; Beauty parlors with salons and barber shops; bouquet/ floristry shops; Gift Shops; Cyber Cafes; money transfer agents (commercial banks agents and mobile phones money transfer agents) and food store such as hotels and butcheries. There are also hawkers who do not own store but sells their wares and food stuff.

1.2 Statement of the problemEveryday all over the world, businesses are set up – large and small scale. People venture into these businesses with one major objective, that is, to make profit and sustain them for the longest period possible (Marx, Van Rooyen, Bosch ;Reynders (1998). However, for many years now, sustaining these businesses has become a challenge in the business world Nickels G. et al (2008). This has made entrepreneurs start at a small scale level even though they had strategic ideas and plans.
The SMEs cut across all the sectors of the Kenya economy and provide one of the most prolific sources of employment creation, income generation and poverty reduction. The sector contributes up to 18.4% (Government of Kenya, 2015) of the country’s gross domestic product. Past statistics indicate that three out of five micro-enterprises comprising of 60% SMEs fail within the first three to five months of inception (Kenya National Bureau of Statistics, 2016). According to statistics obtained from the Nairobi County Council, 2017, most of SMEs in Muthurwa market lack of growth and there is very high number of traders abandoning their businesses even before the expiry of their first annual license.

Various studies have been carried on SMEs in Kenya. Clive D. and Oketch C. (2008) conducted a study on effect of government regulations on growth of SMEs, Ogola, N. (2004), Impediments faced by small-scale entrepreneurs in accessing credit from micro- finance; Ongile, G. (2003), barriers to small firm growth in rural areas in Kenya, a case of Makueni. Among all these studies none have attempted to identify factors impending strategic sustainability of MSMEs in urban areas most specifically Muthurwa market in Nairobi Kenya. Hence the study specifically focused on identifying the effect of availability of finance, change in technology, government policy and entrepreneurial skills on MSMEs in Kenya; a case of Muthurwa market
1.3 Research objectives
1.3.1 Major objective of the studyThe major objective of the study was to evaluate challenges facing strategic sustainability of Micro, Small and Medium Business Enterprises (MSMES) in Kenya; a case study of Muthurwa market in Nairobi County in Kenya.

1.3.2 Specific objectivesTo evaluate the extent to which availability of finance affects strategic sustainability of MSMEs in Kenya.
To assess how technology development challenge strategic sustainability of MSMEs in Kenya.
To establish whether lack of adequate entrepreneurial skills challenges strategic sustainability of MSMEs in Kenya.
To examine how government policies affects strategic sustainability of MSMEs in Kenya.
1.4 Research questions
To what the extent to which availability of finance affects strategic sustainability of MSMEs in Kenya?
How does technological development can challenge strategic sustainability of MSMEs in Kenya?
Does lack of adequate entrepreneurial skills challenges strategic sustainability of MSMEs in Kenya?
To what extent does government policy affect strategic sustainability of MSMEs in Kenya?
1.5 Significance of the study
The study is useful to various stakeholders. This study provides all small scale business traders with information on how to carry out their businesses successfully and how to manage the different challenges that they face. The research was meant for finding out and inform entrepreneurs on the various challenges that are faced in sustaining businesses in Muthurwa and also give them solutions on how to eradicate these challenges.
It is important for the government to realize the need to support entrepreneurs. Therefore, this study was significant to the policy makers by giving them an overview of the challenges faced by MSMEs and develop strategies to address these challenges are special policies for businesses that are starting in order to give them ample time to stabilize. The government should also boost these businesses and this in turn would mean increased income thus leading to the economic growth of the country.
The study was beneficial to researchers as it will provide them with a basis for conducting future research on the subject with the aim of providing further and more detailed insights.
1.6 Limitations of the study
The limitations of this study included uncooperative respondents, unreturned questionnaires, and respondents giving misleading information. However, frequent checks with the respondents and guidance assisted in mitigating these challenges. Some of the business owners were not willing to share information as they considered it confidential. Most of the entrepreneurs had busy schedules which made it difficult for the researcher to get them at their places of work. Most of the entrepreneurs were not cooperative since they did not understand the significance of the study and its benefits or have low literacy level.
1.7 Scope of the study
The research study was about investigating challenges facing the strategic sustainability of Micro, Small and Medium Business Enterprises in Kenya, a case of Muthurwa Market. The study was limited to 743 traders operating in Muthurwa market who have acquired license and pay rent to Nairobi County Authority. Their responses were used to generalize various challenges faced in the strategic sustainability of micro and small business enterprises in Muthurwa Market as well as in the whole country Kenya. The study was limited on various specific variables including availability of finance, rapid change in technology, government policies and lack of adequate entrepreneurial skills.

CHAPTER TWO: LITERATURE REVIEW2.1 IntroductionThis chapter examined various theory related to areas of study, conducted empirical review based on the identified objectives, developed the conceptual framework, identified the research gap and provided the summary of literature review.

2.2 Theoretical reviews2.2.1 Resource Based View TheoryResource Based View Theory (RBV) was developed by Barney (1991) to assess the importance and impact of various assets within the organizations in providing competitive advantage as well as identify their contribution in organizations. A firm’s strategic advantage is based on its distinct combination of factors such as capital, human resources (employees), entrepreneurial and management, skills and capabilities (Andersen (2012)). According to the resource based view, the core competence of the organization leads to a sustained competitive advantage and its ability to adapt new technology. The RBV theory assesses how assets within the organization lead to organization competitiveness.
The theory provides a framework and criteria for determining the type of assets which can be the source of competitive advantage of an organization. The theory emphasizes the need for internal resources as being primary in the determination of policies and procedures since it enables the organization to faces any external forces. Organizations are viewed as able to succeed by gaining and retaining control over scarce valuable resources such as finances, technology and human resources. Proponents of this model, such as Barney (2007), de?ne ‘resources’ as ‘all assets (immovable, employees, finances and technology), capabilities, organizational processes, ?rm attributes, information and knowledge that are controlled by organization to enable it implement its strategies and improve its ef?ciency and effectiveness’. He classi?es them into three categories: physical capital, organizational capital and human capital, where ‘human capital resources’ include the experience, judgments and intelligence of individual entrepreneur, managers and employees at all levels.
A strategic approach to strategic management recognizes that entrepreneurial knowledge and skills, human capital and physical capital such as machinery and plant as well as technology as the key source for competitive advantage. Hitt, L. M. and Zhou X.G, (2002) further describes the quality and availability of these resources can deliver value added and assist in attainment of sustainable competitive advantage through the strategic development of the organization by ensuring the resource s meet the required criteria. The resource-based view of the ?rm concentrates on its internal resources, strategy and business performance, where the contribution of a ?rm’s resources is to promote competitive advantage through acquisition of the right resources in appropriate quality and quantity and aligning them to the strategic goals of the firm.
The theory is relevant to the study because it describes the importance of internal resources within the organization in enhancing its survival, strategic sustainability and competitiveness in the market. It also postulates how finances, human capital, entrepreneurial skills, management skills and technology can impact the business. This constitutes the major components in this study. Moreover, the theory is applicable to all forms of business organization irrespective of their size and the product they are dealing with.
2.2.1 The Technology Acceptance Model (TAM)
Davis (1986) advanced the Technology Acceptance Model particularly examines some of the factors affecting acceptance and use of new technology in business establishments. This theory postulates that the availability of the technology, perceived usefulness, affordability and perceived ease of use by an individual affects their intention and behavior to use any technology. According to theory, usefulness, availability and affordability of technology primarily are key to adoption of any technology. Perceived usefulness was postulated as the degree to which an individual believes using the system will improve their performance (Venkatesh & Davis (2010). On the other hand, perceived ease of use is the extent to which a person believes that using the system will be free from error. The Technology Acceptance Model concludes that principle foundation in acceptance of any technology is combinations of factors, perception and beliefs that the users find of great significance to any firm. Huang, S. Y., et al (2012) also suggested adoption of technology is determined by individual differences such as age, gender, and experiences.

According to the model, user behavior varies across a broad range of end-user computing technologies and user populations. The model does incorporate long term accumulated findings of IS research, and therefore well suited particularly technology (Welch & Worthington, 2010). Use of technology is influenced by a number of factors such as social factors and culture of youth which is flamboyant in nature. Technology should be both easy to learn and easy to use meaning that perceived ease of use is expected to have a positive influence on users’ perception of credibility and intention of using internet marketing (Rowley 2011).

The TAM is relevant for it underpins factors that influence firm in adoption of new technology in their business. Today, technology use has posed great challenge to those who does not keep at abreast with it and an opportunity to entrepreneurs who implement it on time. According to Petter, S., et al (2013), modernization and competitiveness of any business enterprise depends on how well one is able to adapt to the prevailing business environment. Hence in a competitive market such as Muthurwa in Nairobi, strategic sustainability of any business may to some extent depend on how well a trader is able to use technology in managing and marketing his/her business.
2.2.3 Chaos Theory The Chaos theory was put forth by Bower (1988). The theory insists on the importance of maintaining order and controls any business situation in speed and agility so as to reduce exposure to unfair business practices, fraud, transaction failure, protection of client information and reduce security anxiety. According to Benita and Beamon (2008), setting adequate and reasonable laws to regulate business activities may reduce chaos associated by poor structured market. Jim, B (2013), further commented that regulating the behavior of the firms as well as setting the conditions that eliminates complex loopholes and enhances security, the interest of both consumers and traders are to great extent protected. Some authors such as Hitt, L. M. et al, (2002) disagreed on the needs of authorities to set laws on how the business should be operated, standards required, level of integrity to be practiced and how they should behave in the market place. They urged that the consumers are more informed and firms have moral obligation to behave ethically rest they lose their position in the market. Keith, Davis, and William Me (1992), argued that the businesses should regulate themselves for there no laws which can be universely accepted in all markets unless all diversities are considered.

Chaos theory study since it attempts to explain how various rules and regulations formed by the government affects the strategic sustainability of MSMEs in Kenya. It’s worth noting that the laws, rules and regulation are meant to reduce chaos in the business as well as ensuring fair business practices are enhanced and customers’ interest protected. Kessler (2013) adds that the way security concerns are managed invariably affects all the others. Cultural and social Factors should be considered when setting the business regulations. He further agrees for business to thrive order must be maintained.

2.3 Empirical ReviewMany decisions have to be made before launching and managing a business, no matter its size. Among the factors to included includes the products, knowledge and experience on the business, target market, expected income, location, capital outlay required, employees needed among others. To sustain a business, the answers to the questions above become challenging and the only way forward is to balance decisiveness with caution. Preparatory work includes evaluating the market opportunity, developing the product or service, preparing a good business plan, figuring out how much capital is needed, and making arrangements to obtain that capital need to be prioritized before engaging in any business establishment.
2.3.1 FinanceAccording to Mutua et al 2006, Small and medium enterprise faces a lot of challenges in their operation. These challenges range from credit rationing, insufficient finance, lack of accurate documentation, lack of collateral, regulations, and high interest rates. Small and medium-size enterprises (SMEs) have long been recognized as one of the cornerstones of a country’s development. It is, thus, important to understand what contributes to their success as well as the difficulties they face. Studies conducted by Jeyanth, K. 2003, showed that the lack of available financing from financial institutions is one of the biggest problems facing small businesses today (Stevenson, L. 2007). Small businesses face a different range of problems than their larger counterparts, due to their inability to enjoy some of the same advantages in the marketplace. Humphrey, K. 2006, suggested most financial problems are due to revenue and cash-on-hand availability when the bills come due. But confronting these obstacles before they become a headache can help you to prevent them from becoming a major issue for your company.

Unforeseen expenses due to occurrence of unplanned expenses may be a big challenge especially to start-up companies (Rusdy, H. 2007). Expenses, such as government levy, county council license fees, increase in the cost of goods, can cause a major change in the business. Catastrophic Change may probably not cause a great loss as compared to MSMEs. A natural disaster or other major disruption can lead to closure of SMEs. These challenges have a lot of impact on growth, profitability and financial innovation of MSMEs.

According to Bartol M.K. (1998), new ventures, even small ones, requires funds to operate. Moreover, most of their revenues in the early years must be ploughed back into the business to fuel growth. New businesses rarely show a profit in the early months of operation. Generating sales takes time, and receipts are not usually sufficient to offset start-up costs and monthly expenses. Therefore, entrepreneurs need to estimate how much money they need and then raise that amount to transform their dream into a reality. Lincolin, A 2005, claimed that many entrepreneurs struggle to find the capital to start a business. There are many sources to consider, it is therefore important for an entrepreneur to fully explore all financing options. He should also apply for funds from a wide variety of sources. They added the major issue associated with securing funding is the amount if equity (ownership of the firm) and potential control an entrepreneur or prospective small business owner must relinquish to obtain the necessary financing.
Debt capital is a source of finance for an entrepreneur. Debt capital financing involves a loan to be repaid, usually with interest and a security is normally given which may include cars, houses or machinery. According to Rusdy, H. (2007), personal savings is the best source of capital for any business. It is easy to use, quick to access, has no payback terms, and requires no transfer of equity (ownership). It also demonstrates to potential investors that the entrepreneur is willing to risk his own funds and will per severe during hard times. Craig. F, 1997, claimed friends and family is people who believe in the entrepreneur, and they are the second easiest source of funds to access. They do not usually require the paperwork that other lenders require. These funds however, should be documented and treated like loans. Entrepreneurs can use personal credit. This is an easy source of funds to access, especially for acquiring business equipment’s.
Hospes, R. 2002, observed banks are very conservative lenders. Many prospective business owners are disappointed to learn that banks do not make loans to start-up businesses unless there have outside assets to pledge against borrowing. Many entrepreneurs do not have enough assets to get a secured loan from a lending institution. However, if an entrepreneur has money in a bank savings account, he or she can usually borrow against that money. If an entrepreneur has good credit rating, it is also easy to get a personal loan from a bank. These loans tend to be short-term and not as large as business loans.
Venture investors are a major source of funding for start-ups that have a strong potential for growth (Humphrey, K. 2006). He added venture investors insist on retaining part ownership in new businesses that they fund. Formal institutional venture funds are usually limited partnerships in which passive limited partners, such as retirement funds, supply most of the money. These funds have large amounts of money to invest.
The most important issue to any small business entrepreneur is cash flow. William G. Nickel et al (2008) and Rusdy, H. 2007, stated that entrepreneurs need to estimate how much cash they need to cover expenses until the business begins to make profit through tools like income statement and cash flow statement. Christopher, J. ; Colin, H. 2006, defined Cash flow as the amount of money actually available to make purchases and pay current bills and obligations. It is the difference between cash receipts (money taken in) and cash disbursements (money spent) over a specific time period. They further stated that, a cash flow statement estimates anticipated cash sales as well as anticipated cash payments of bills. This forecast is used to project the money required to finance the operation annually. They also help the entrepreneur in financial management of his/her business to enhance strategic sustainability, solvency and stability.

2.3.2 Entrepreneurship
Entrepreneurship is the practice of starting a business an organization or fortifying mature organizations, particularly start-up businesses, generally in response to identified opportunities. Entrepreneurship is often a difficult undertaking, as a vast majority of new businesses fail. According to Schumpeter (1950), “an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation”. Frank H. Knight (1997) added entrepreneurship is about taking risk that is the behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture.
Nickels G. et al (2008) indicated that entrepreneurship has four social benefits, that is, it fosters economic growth; increases productivity; creates new technologies, products and services; and it changes and rejuvenates market competition. Entrepreneurship has brought about economic growth and employment opportunities. New ventures and small firms or businesses create new job opportunities. According to Robbins, S.P, (2000), the economic impact of small business job growth is likely to be greatest during times of economic slowdown, when larger companies are cutting back. During such reductions, many individuals whose jobs are eliminated find employment with small businesses. Productivity is the ability to produce more goods and services with less labor and other inputs (resources). One reason for the greater interest in entrepreneurship has been the growing recognition of its role in raising productivity. A major drive in the focus on productivity is the international competition.
Kendrick J. (2003) suggested that entrepreneurial function par excellence. Two keys to higher productivity are research and development (R;D) and investment in new plant and machinery. He added there is a close link between R;D and investment programs, with a higher entrepreneurial input in both creating healthy competition and also encourages higher quality products.
Innovation and new technologies: entrepreneurship has introduced many new products and services that have changed the way we live. Zoltan (1997) considered small businesses created by entrepreneurs as agents of change in market economy. Ricky, G and Ronald, J (2009), added income generation and increased economic growth, more goods and services available, development of new markets, encouragement of more researches and studies and development of modern machines and equipment for domestic consumption. Development of entrepreneurial qualities and attitudes among potential entrepreneurs to bring about significant changes in the suburbs, freedom from the dependency on the jobs offered by others, the ability to have great accomplishments, reduction of the informal economy and emigration of talent may be stopped by a better domestic entrepreneurship climate (Pincus H, (1998)).
2.3.3 Technological Development and MSMEsAccording to Sambamurthy, V., A. et al, (2003), business systems have reached the point where it’s difficult to operating even a small company without basic technology such as desktop computers to receive email and keep records. Technological innovations speed up workflow and provide indispensable systems for organizing information. However, technology can also have negative effects on a business, ranging from the cost to making communication more impersonal as well as creating a false sense of knowledge. Although businesses cannot to abandon technology entirely, it is useful to understand potential pitfalls and develop solutions to compensate when needed.

Computers store and organize information in ways that would often take human beings considerably more time. It takes little time to prepare a profit and loss statement using QuickBooks, while it might take too long to compile it manually (Fairbank J., Labainca G., Steensma H., and Metters R (2006). The person who enters the data must be familiar with the company’s operations, model and the templates it uses for information to be meaningful.

Technology saves money for your business by saving time. The time required compiling reports; In addition, up-to-date information, access and respond proactively will be less. However, the cost involved is very high. Acquisition of computers, its hardware and software, training, maintenance and upgrading them can be expensive. These expenditures may be costlier than the time you save.

The enhanced information accessibility through computer systems raises a range of privacy issues (Hafeznia, M. D. R. (2006). He added collection of customer data on their needs and behavior, firms are able to effectively target advertising and promotions. Some customers consider these records kept by the companies as invasion and a violation of their privacy, and it raises lots of legal issues. Some businesses use technology to monitor their employees’ performance and behaviors and performance and this can create a hostile work environment. Unscrupulous individuals may hack to computer systems and steal valuable proprietary information.

Technologies can also lead to improved efficiencies by speeding up business processes. It also helps in processes consolidation hence moving more quickly than humans can. Contrarily replacing humans with machines can introduce new problems. Large-scale automation creates social problems by putting people out of their jobs. New technology should be implemented in consideration of developing retraining programs to ensure displaced employees will do other types of work. Miles, M. B., & Huberman, M. A. (1994) in their studies commented technology improves communication services. Businesspeople living in different parts of the world can contact their partners, customers and employees and business partners as well as their telephonic communication. Not only this, technology takes the business levels higher with its online communication services. People can now interact and see each other while talking to them via software like Skype, Video Chat. Important business conferences between the clients as well as business partners are done with the help of technology.

Technology plays a vital role in enhancing Improving Business Strategies by promoting their business on the web, on media and many other sources that technology created (Gattiker, Thomas F. and Goodhue, Dale L. (2005). Different companies have spread their branches all over the world. They connect with with the help of technology. Organizations find employees with high knowledge, skills and capabilities through technology. Technology has many positive effects on modern business in this period of time. A good interactive communication is a key to a successful business. One of the ways to use technology is to use word press business website development.

Montverde, K. and Teee, D. J. (1992), added technology adds various new techniques of promoting businesses whether it is a small level business or business of high level. These businesses generate large profits from these technological methods of promoting their business. This is how the technology works as a great source of producing large profits. The most important and popular factor affecting the businesses are social media presence of any business. Technology is adding up new things in social media sites day by day. Eventually, this is helping businesses to progress to a large extent. Technology amplifies business by enabling business to make tremendous changes that are made in old businesses as well as new businesses. High technology devices work much faster than old devices and this leads to increase in the income generation of the business. A sudden reaction makes the businesses more active and fast such as Work Sight workforce software.

Miles, M. B., & Huberman, M. A. (1994), argued of the businessmen or entrepreneurs make use of technology in order to drop the cost of their business. Technology makes the work in offices simpler than ever. One person can handle the work with the help of technology that was being handled by two to three workers. This is one of the advantages to the business profit. At the same time, employment rates are decreased with this.

Computerized improves accuracy in the business. Zikmund W, (2005) commented it leaves no chances of any kind of mistake. All the data is accurately observed and accurate statistics are obtained using advanced technology. The figures that we get in excel sheets or computational work is accurate and there are no chances of getting any error. You can rely on the calculations done on the computer systems. Technology also increases connectivity and the ease with which we can all stay in touch. Whether it’s having your coworkers and employees available via text/video chat at a moment’s notice, or being able to send targeted promotional email blasts to prequalified customers when they’re shopping at nearby businesses, the rise of mobile technology has blended almost seamlessly with communication software to create a hyper-real web of real time information.

Spam refers to unwanted and unsolicited email messages. Spam is widespread and has negative impacts on business, according to Huang, S. Y., Huang Wu, S. T H and Lin, W.-K. (2009). Wading through spam email is a waste of time, and spam filters can only do so much. Users of spam filters must then check for necessary email messages diverted incorrectly as spam. The popularity of ecommerce has had a negative impact on brick-and-mortar retail stores. Smaller stores are finding more and more difficult to compete with both Internet businesses and larger retail stores.
2.3.4 Government policy
According to Thomas A. Garrett (2001) government policies can be categorized as active or passive depending on whether they involve the government in determining which types of businesses are promoted. Active policies, such as targeted tax breaks, help specific forms of businesses, while passive policies help create an environment that is friendly to entrepreneurs without regard to specific firms. Garrett continues to say “both active and passive policies are effective in promoting small businesses, but passive policies promote entrepreneurship most broadly and it is this entrepreneurial-friendly environment that will allow any individual or business-regardless of size, location or mission-to expand and to thrive”.
Consumers must be protected from business owners who are eager to sell without taking into consideration the well-being of customers. Ondego, G. (2007), argued Consumers must be protected from overcharging, poor quality goods and services and short measurements and weights. It is a statutory requirement that the seller must state the price of the product. To prevent overcharging of basic of subsided products, the government set maximum retail price (MRP) aiming at controlling prices. Naituli, G Wagulo, F and Kaimenyi, B (2010), added government also sets quality standards which all the traders and the producers should abide to. This ensures consumers are getting quality products and services.
According to Mwangi, N. (2013), Zoning Laws protect the environment by identifying certain wildlife, water catchment and other strategic areas that should not be disrupted by development. Therefore, the areas are protected from any business activities.

Government also charge taxes to finance public utilities. It also charges extra charges on firms that pollute the environment aiming at forcing them to find alternative methods to reduce pollution to avoid this penalty. Custom duties charged on imported goods to protect local industries from intense competition from established international companies. It also offers a Tax concession that is reduced tax rates or offer tax holidays to industries to encourage production (Mwangi, N. (2013)). He added subsidies are also granted to reduce the cost producers incur in production of goods and services. Government may also set quotas to restrictions the quantity of a product imported within a certain period of time as well impose bans on prohibited products or activities.
Government offers assistance to businesses to facilitate their survival and growth the aim is to reduce the level of unemployment, increase GDP and foreign exchange earnings. Hence MSMEs need to be supported and encouraged by government. It offers training facilities, financing local MSMEs by providing loans at low interest rates. Promotion is enhanced at both Local and international level. It organizes local and international trade shows and exhibitions; as well as general advertisements. It promotes businesses overseas through commercial attaches.

Longnecker J, (2000) argued the most successful strategies for encouraging entrepreneurship and small business are changes in tax policy, regulatory policy, access to capital, and the legal protection of property rights. Bartol M. Kathryn, Martin C. David (1998) explains that governments use taxes to raise money. But taxes increase the cost of the activity taxed, discouraging it somewhat. Therefore, policymakers need to balance the goals of raising revenue and promoting entrepreneurship. Corporate tax rate reductions, tax credits for investment or education, and tax deductions for businesses are all proven methods for encouraging business growth.
In his studies, Ogola, N. (2004) observed government can also lessen the risks of the entrepreneurship by passing laws that enable business people to write contracts that are enforceable in court. The government can also establish a currency that is tradable in world markets. With this, the entrepreneur can buy and sell goods and services anywhere in the world using that currency. Steve Strauss (2004) argued the simpler and more expedited the regulatory process, the greater the likelihood of small business expansion”. He emphasizes reducing the cost of compliance with government regulations is very also helpful. Governments can provide one-stop service centers where entrepreneurs can find assistance and allow electronic filing and storage of forms.
For entrepreneurship to flourish in Kenya, the law needs to protect intellectual property. If innovations are not legally protected through patents, copyrights, and trademarks, local entrepreneur are unlikely to engage in the risks necessary to invent new products or new methods (Naituli, G Wagulo, F and Kaimenyi, B (2010). The reason is that; most innovations take place in new businesses-which unlike large firms do not have the power to resolve disputes outside the courts.”
Governments can also show that they value private enterprises by making it easier for individuals to learn business skills and by honoring entrepreneurs and small business owners. Longnecker J, (2000), suggested policy makers can: offer financial incentives for the creation of business incubators. These usually provide new businesses with an inexpensive space in which to get started. Often business incubators are associated with colleges, and professors offer their expertise. Enhance the status of entrepreneurs and businessmen in the society. Governments might create local or national award programs that honor entrepreneurs and call on business leaders to serve on relevant commissions or panels (Ogola, N. (2004)).
2.4 Conceptual framework
The aim of this section was to show the relationship between explanatory and independent variables.

Figure 2. SEQ Figure * ARABIC 1 Conceptual FrameworkIndependent variablesDependent variable
160591513461900287146913462000Finance
160655015240000Technological development
Strategic sustainability of Micro, Small And Medium Enterprises
11684003365500
156591018161000Entrepreneurial skills
160591514097000Government Laws and regulation
Source: Author 2018
2.4.1 Finance
Finance is the backbone of any business enterprise. Timely availability of finance either from personal sources or debts is essential when establishing the business or for its survival. Without it, then there is no business. Most businesses fail, due insolvency or lack of adequate working capital. It is therefore, important for an entrepreneur to manage his or her finances properly. Whether a business will be sustained for a long time, largely depends on how cash inflows and cash outflows are handled
2.4.2 Entrepreneurship
The entrepreneurial ability to combine other factors of production in the right proportion as well as manage them appropriately can greatly impact on business survival. The vision, mission and the objective of the person who intends to start a business can determine the business growth and survival. As the entrepreneur takes the risks in a very dynamic and unpredictable environment, they should exercise a lot caution when establishing and running the business.
2.4.3 Technology
Technology is the major drive of change in businesses today. It has led to ease in communication, improved connectivity, introduction of new products, materials and processes of conducting the businesses. The cost of installation, maintenance, upgrading and training is a great challenge especially for MSMEs. The cost of internet and its connectivity is also high. The problems associated with internet connectivity accessibility are myriads. Today business promotes their products through mobile phone calls, websites, Facebook, telegram, emails, Short Messages Subscription (SMS) among others.

2.4.4 Government Policy
This is a factor to be given much consideration. The government develops laws and regulations which may positively or negatively. It levies taxes, give subsidize, assists in promotion of products either locally or internationally, trains entrepreneurs on managerial and technical skills, develop policies and also financial assistance. The government should also try to protect these businesses that are starting for the benefit of the citizens of that country as well as its economy.
2.5 Research Gap
In general, most owners and managers regarded their small businesses as being successful. Their positive attitude and knowledge of potential pitfalls are important contributors to future business success (Montverde, K. and Teee, D. J. (1992)). However, the knowledge of problem areas experienced by small businesses provides valuable information for policy makers in both the government and private sector. In formulating policies and developing assistance programs, information is required so that attention and finances can be focused on the appropriate areas. Educators and academics can direct their teaching and course development towards addressing specific problem areas so as to increase the chances of business success. Small business managers should be well equipped to make more informed decisions and to steer business away from known problem areas. Unfortunately, little can be done to curb the impact of environmental variables such as inflation, interest rates and unemployment, but small business owners and managers should plan and budget taking into account the possibility of a volatile economic environment. Crime is also a serious problem facing small businesses. The private sector is going to have to undertake steps such as proactive planning and the educating of labour, to assist the government in combating these problems. Galbraith, J. R. (2007) noted problem relating to increased competition can only deteriorate as Kenya becomes a more integral part of the global and electronic economy. Innovative and differentiating strategies have to be implemented in order for small businesses to obtain a competitive advantage.
Small business owners must implement stricter credit policies and debt should be avoided as far as possible. Unfortunately having a small business often involves working long hours, which leads to having a reduced social life. However, with careful planning and time management as well as learning the art of delegation a small business owner can achieve a better balance in terms of his or her work and social life. Future research involves firstly a continual refining and developing of a reliable and valid measuring instrument, and secondly establishing whether statistically significant relationships exist between selected problem categories, business success and various demographical variables.
2.6 Summary
It is evident that new businesses require a contribution and combination of certain factors such as entrepreneurship skills, financial aid, adoption of technology, a well scrutinized and developed market and business friendly government policies. With these variables well considered the vision of many entrepreneurs stand high chance of being realized. Even though starting a business might seem an expensive venture, both financially and in terms of resources, if it can be able to grow and sustain itself, it finally become stable, positive results are realized and in the long run might end up being a big economic power house.
CHAPTER THREE: RESEARCH METHODOLOGY3.1 IntroductionThis chapter provides a discussion of the outline of the research methodology that was used in the study. It focused on research design, target population, sample design, and data collection instruments and procedure, data analysis and presentation, reliability and validity, expected output and ethical considerations. The research was carried out at Muthurwa market in Nairobi County, in Kenya.
3.2 Research DesignThe research project focused on the challenges facing the strategic sustainability of micro and small medium business enterprises in Muthurwa market. The research design that was employed in this study is descriptive research design method. Descriptive design is used to obtain information concerning current status of the phenomena to describe what exists with respect to variables or conditions in a situation and allows the researcher to describe record, analyze and report conditions that existed Kothari (2005). The design is most appropriate when detailed, in-depth analysis for a study is desired. Case study research design provides very focused and valuable insights to phenomena that may otherwise be vaguely known or understood. The design enables the researcher not only to establish factors explaining phenomena but also unearth underlying issues, Kombo and Tromp (2006). Questionnaires were administered to the selected employees.

3.3 Target Population
This study targeted 743 business people operating in Muthurwa Market in Nairobi. The businesses were categorized as shown in table 3.1 below.

Table 3. SEQ Table * ARABIC 1 Target populationPopulation in category Population size Percentage
Grocery shops (agricultural products) 187 25
Boutiques (New, Second hand clothes and shoes) 314 43
Beauty parlors with salons and barber shops; 56 7.5
Bouquet/ floristry shops 49 6.5
Gift Shops 24 3
Money transfer agents 47 6.3
Cyber Cafes 23 3
Ready Food store (hotels and butcheries) 43 5.7
TOTAL 743 100
Source: Nairobi County Council 2018
3.4 Sampling3.4.1 Sample Design
Neuman (2004) argues that, the main factor considered in determining the sample size is the need to keep it manageable enough and derive detailed data at an affordable cost in terms of time, finances and human resource. The study ensured a high degree of correspondence between a sampling frame and the sample population. A sample of 20% of a population was selected. Cooper and Schindler (2006) who argue that if well chosen, a sample of less than 30 percent would be idea in a descriptive design research study especially if the target population is not too large. In this study a multistage sampling method was adopted. McQueen ; Knussen (2010) says multistage sampling combines several methods of sampling. In this case business owners and employees of the different businesses were divided into strata. The study took 20% of the respondents from each stratum. Simple random sampling using random numbers was used to select the respondent as shown in the table 3.2 below.
3.4.2 Sample SizeThe Sample size included 148 respondents representing 20% of the target population. The composition of the respondents was classified according to the category of the business they operated is shown in the table 3.2 below.

Table 3.2: Sample populationPopulation in category Sample size Percentage
Grocery shops (agricultural products) 35 25
Boutiques (New, Second hand clothes and shoes) 61 43
Beauty parlors with salons and barber shops; 11 7.5
Bouquet/ floristry shops 9 6.5
Gift Shops 5 3
Money transfer agents 8 6.3
Cyber Cafes 10 3
Ready Food store (hotels and butcheries) 9 5.7
TOTAL 148 100
Source: Author 2018
3.5 Data Collection Instrument and Procedure3.5.1 Questionnaires
The data was collected using questionnaires (appendix 2) which had both closed and open ended questions. According to Glass and Hopkins (2002), closed ended questions enables the researcher to get detailed controlled response which can be analyzed using quantitative methods while open end questions enable the researcher to capture the divergent views of the respondent. Questionnaire was preferred in this study because respondents of the study were literate and were able to answer questions asked adequately. Questionnaires are at their best when they are well designed and when the researcher is trying to find out concrete and unambiguous phenomena (Nassiuma, 2010). According to Farag (2009) questionnaire is one of the most cost effective ways to obtain information from a large pool of people, give better results, more specific, accurate and faster. According to Mugenda and Mugenda (1999) a response rate of 50% is adequate for analysis and reporting; a rate of 60% is good and a response rate of 70% and over is excellent.

3.5.2 Data Collection Procedure Before the collection of the data, the researcher requested for an official letter from The Presbyterian University of East Africa to acknowledge that he was a student carrying on research project. Printed copies of questionnaires were distributed randomly to businesses in Muthurwa market in Nairobi County.
3.6 Pilot TestTo establish validity, the research instrument was given to two experts who were experienced in training need assessment to evaluate the relevance of each item in the instrument in relation to the objectives. The same were rated on the scale of 1 (strongly disagree) to 5 (strongly agree). Validity was determined by use of content validity index (CVI). CVI was obtained by adding up the items rated 3 and 4 by the experts and dividing this sum by the total number of items in the questionnaire. A CVI of 0.747 was obtained. Oso and Onen (2009), state that a validity coefficient of at least 0.70 is acceptable as a valid research hence the adoption of the research instrument as valid for this study.

3.7.1 Validity of the InstrumentValidity as noted by Kothari (2004) is the degree to which result obtained from the analysis of the data actually represents the phenomenon under study. Content validity is used to measure of the degree to which data collected using a particular instrument represents a
specific domain or content of a particular concept. To enhance content validity, the researcher
used experts to examine and review the data collection instrument. Three experienced
professional researchers examined each and every item in the data collection instrument and
evaluated their relevance to the topic and objectives under study. The researcher also
selected 10 respondents randomly to fill the questionnaire (but the respondents were not included
in the study) before commencement of data collection. As Hafeznia, M. D. R. (2006) his
enabled the researcher to establish the respondents’ ability to respond without difficulties. Any
ambiguous, double edged and unclear questions were identified and rectified.
3.7.2 Reliability of the InstrumentReliability on the other hand refers to a measure of the degree to which research instruments yield consistent results (Mugenda & Mugenda, 2003). The researcher selected a pilot group of 10 individuals, from the target population to test the reliability of the research instruments. Cronbachs alpha coefficient which is used to assess the internal consistency among research instrument items was used to test whether the variables are within the acceptable range of between 0 and 1 (Mugenda and Mugenda 2003). The closer the Cronbach Alpha coefficient is to 1.0, the greater the internal consistency of the items in the scale and the closer the Cronbach coefficient is to zero (0), the less the internal consistency of the items in the scale. Nunnally (1978) suggests that a value of not less than 0.7 shall be acceptable while Sekaran (2000) posits that any values between 0.5 and 0.8 are adequate to accept internal consistency. The general commonly accepted rule of thumb for internal consistency considered Cronbach’s Alpha of 0.8;a;= 0.7 acceptable.
3.8 Data Presentation and AnalysisThe data collected was analyzed by use of the Statistical Package for Social Sciences (SPSS) program. Quantitative methods like mean, percentages, frequencies and standard deviation were used to describe the background findings while inferential statistics like correlation analysis were used to establish relationships between the independent and dependent variables. The findings were presented in frequency tables, charts and graphs.
Content analysis was used to test data that was qualitative in nature or aspect of the data collected from the open ended questions. The study also used one-way ANOVA to test the level of significant of the variables on the dependent variable at 95% level of significance. In addition; the study conducted a multiple regression analysis. The multiple regression equation was;
Y = ?0 + ?1X1 + ?2X2 + ?3X3 + ?4X4 +?
Where Y is the dependent variable (strategic sustainability of MSMEs), ?0 is the regression constant,?1, ?2, ?3, and ?4 are the coefficients of independent variables, X1 is Finance, X2 is technological development, X3 entrepreneurial skills is and X4 is Government policies, rules and regulations affecting the operations of MSMEs and ? is the error.

3.9 Ethical Consideration.
Protecting the rights and welfare of participants was a major obligation of all parties involved in research study. Ethical, safety and privacy of every individual was taken into consideration while carrying out the research project. Confidentiality of data collected will be put into consideration as part of the ethics. This will be by ensuring that it is not disclosed to any other party that may use the data for their own purpose (Mugenda ; Mugenda, 2008). Participants were informed the purpose of the study and it was voluntary. They were also informed that they could withdraw if they didn’t wish to continue. The participant’s personal details were eliminated and only relevant information to the survey was gathered. There was no discrimination on the basis of sex, race, ethnicity, or any factor that was not related to scientific competence and integrity.

CHAPTER FOUR: DATA ANALYSIS AND PRESENTATION4.1 IntroductionThis chapter dealt with data analysis and presentation. The data was analyzed using quantitative and qualitative methods and presented using tables, pie charts and graphs.
4.2 Response RateThe study targeted 148 respondents 35 from Grocery shops (agricultural products), 61 from boutiques (New, Second hand clothes and shoes), 11 from Beauty parlors with salons and barber shops, 9 from Bouquet/ floristry shops, 5 from Gift Shops, 8 from Money transfer agents, 10 Cyber Cafes and 9 from Ready Food store (hotels and butcheries). The response rate was as shown in the table 3 below.

Table SEQ Table * ARABIC 3 Number of respondentsPopulation in category Sample size Percentage
Grocery shops (agricultural products) 21 20
Boutiques (New, Second hand clothes and shoes) 42 40
Beauty parlors with salons and barber shops; 10 9.5
Bouquet/ floristry shops 9 8.6
Gift Shops 5 4.8
Money transfer agents 6 5.7
Cyber Cafes 7 6.6
Ready Food store (hotels and butcheries) 5 4.8
TOTAL 105 100
Source: Researcher data, 2018
Out of 148 questionnaires issued 117 representing 80% were returned duly filled. 12 questionnaires were rejected because they were either not complete or were inconsistent hence not eligible for analysis. Hence 105 questionnaires amounting to approximately 71% were analyzed as shown in the table above.

4.3 Background InformationThis section analyzed respondents personal profile such as gender, age, designation, period of time they had worked with the organization and the highest level of education4.3.1 Demographic Information
Researcher requested respondents to indicate their gender to establish gender distribution of MMSEs traders’ in Muthurwa Market.Table SEQ Table * ARABIC 4.2 Demographic informationGender Frequency Percent Cumulative Percent
Male 71 67.7 67.7
Female 34 32.3 100.0
Total 105 100.0 Source: Researcher data, 2018
From the table above 71 respondents were male while 34 were female representing 67.7% and 32.3% of all the respondents respectively. Hence the majority of the traders were male.

4.3.2 Businesses trader conduct at Muthurwa marketTable SEQ Table * ARABIC 5 Business trader conduct at Muthurwa marketType of business Number Percentage
Grocery shops (agricultural products) 23 21.9
Boutiques (New, Second hand clothes and shoes) 40 38.1
Beauty parlors with salons and barber shops; 10 9.5
Bouquet/ floristry shops 9 8.5
Gift Shops 5 4.8
Money transfer agents 6 5.7
Cyber Cafes 7 6.7
Ready Food store (hotels and butcheries) 5 4.8
TOTAL 105 100
21.9% of the traders were dealing with Grocery shops (agricultural products), 38.1% from boutiques (New, Second hand clothes and shoes), 9.5% from Beauty parlors with salons and barber shops, 8.1% from Bouquet/ floristry shops, 4.8% from Gift Shops, 5.7% from Money transfer agents, 6.3% Cyber Cafes and 4.5% from Ready Food store (hotels and butcheries).4.3.3 Age Distribution of MMSEs traders in Muthurwa market in NairobiTable 6 below shows age distribution of MMSEs traders in Muthurwa market, Nairobi. 3% of the respondents were below 24 years, 6% between the age of 25 to 30 years, 13% between 31 to 34 years, 33% 35 to 40 years, 38% between 41 to 44 years and 6% between 45 to 0 years. There was no respondent above 50 years. The majority of the respondents were between 35 to 44 years totaling to 70% of the respondents.

Table SEQ Table * ARABIC 6 Age Distribution of traders in Muthurwa marketAge in Years Frequency
Percent Cumulative Percent
Below 20 3 2.9 2.9
21 – 25 7 6.7 9.6
26 – 34 14 13.3 22.9
31 – 35 37 35.2 58.1
36 -44 37 35.2 93.3
45 – 50 7 6.7 100.0
Total 105 100 4.3.4 The highest level of education attainedThe respondents were requested to indicate the highest level of education. The researcher wanted to establish the ability of the respondents to read, understand, interpret and fill questionnaire accurately.Table SEQ Table * ARABIC 7 Highest Education LevelHighest Education Levels Frequency Percent Cumulative Percent

Primary Certificate
Secondary Certificate 15
72 14.3
68.6 13.5
82.9
Diploma/Certificate 13 12.4 95.3
Graduate Degree and Above 5 4.7 100.0
Total 105 100 Source: Researcher data, 2018
Table 7 above, 14.3% of the respondents had attained Kenya Certificate of Primary Education, 68.6% had Kenya Certificate of Secondary Education, 12.4% had undergone Certificates and Diploma courses, bachelor’s degree and above 4.7%. Majority of the respondents who filled the questionnaire were literate and had capacity to read, understand and answer the questionnaire appropriately.

4.3.5 Period of time in years trading in Muthurwa market
The study sought to establish the duration of time the respondent had traded in Muthurwa market. The aim was to establish how well the respondent was acquainted with knowledge and challenges facing traders in Muthurwa market in Nairobi.
Table 8 shows that only 5.6% of the respondents had traded for a period below 1 year in Muthurwa Market. 10.4% have worked between 1 to 4 years, 25.6% between 5 to 9 years, 33.2% 10 to 15 years, 20.5% 15 to 19 years and 4.7% above 19 years. Hence the majority of the respondents had traded in Muthurwa market for a relatively long period of time that is more than 10 years.

Table SEQ Table * ARABIC 8 Period trading in Muthurwa marketFrequency Percent Cumulative Percent
Below 1 year 6 5.6 5.6
1 – 4 years 11 10.4 16
5 – 9 years 27 25.6 41.6
10 -14 years 35 33.2 74.8
15 – 19 years 21 20.5 95.3
Above 19 years 5 4.7 100.0
Total 105 99.1 Source: Researcher data, 2018
4.3.6 Number of employees employed by traders in Muthurwa marketThe researcher sought to establish the number of employee’s traders in Muthurwa Market had employed. The aim was to evaluate whether all the business under the study qualified to be classified as MSMEs
Table SEQ Table * ARABIC 9 Number of employees employed by traders in Muthurwa marketNumber of workers Frequency Percentage Cumulative Percent
Nil
1-5
6-10
10-15
16 and over 23
51
18 21.9
48.6
17.1 21.9
70.5
87.6
9 8.6 96.2
4 3.8 100.0
105 100.0 Source: Researcher data 2018
From the above tabulation, 21.9% had no employee(s), 48.6% of the respondents had employed between 1-5 employees, 17.1% 6-10 employees, 8.6% and 4% had employed between 10- 15 employees and over 16 respectively. Majority of the traders had between 0-5 employees that is 70.5%.

4.4 Challenges facing strategic sustainability of MSMEs in KenyaStudy aimed at establishing whether the following factors affect the strategic sustainability of micro-small and middle size business in Muthurwa market.This was vital for the researcher to identify whether the traders are conversant with some of the challenges affecting the strategic sustainability of the business as shown in table 10 below. 97.7% agreed finance challenges strategic sustainability of their business followed by government policies, rules and regulations with 95.5%; Entrepreneurial knowledge and skills 79.1% while 63.7% changes in technology. 2.3% disagreed finance challenges strategic sustainability of their business. 4.5%, 21.9% and 32.7% replied government policies, rules and regulations, Entrepreneurial knowledge and skills and changes in technology does not affect strategic sustainability of their business respectively.Table SEQ Table * ARABIC 10 Challenges facing strategic sustainability of MSMEs in KenyaFactor Finances Entrepreneurial knowledge and skills Changes in technology Government policies, rules and regulations
Yes 97.7 79.1 67.3 95.5
No 2.3 21.9 32.7 4.5
Total 100 100 100.0 100
Source: Researcher data, 2018
4.4.1 The extent that the following factors affect strategic sustainability of MSMEs in Muthurwa marketTable SEQ Table * ARABIC 11 The extent factors affect strategic sustainability of MSMEs in Muthurwa marketFinances Technological development Entrepreneurial knowledge and skills Government policies, rules and regulations
N Valid 105 105 105 105
Missing 1 1 1 1
Mean 4.5355 3.6545 2.5364 4.4182
Std. Deviation .70952 .85065 .51895 .79635
Source: Researcher data, 2018
Results obtained in table 11 above showed majority the respondents’ agreed Finances, Technological development, Entrepreneurial knowledge and skills and Government policies and regulations affect strategic sustainability of MSMEs but in varying extent. Finances had mean of 4.25 and SD 0.709, Technological development mean of 3.65 and SD 0.8506, Entrepreneurial knowledge and skills mean of 2.536 and SD 0.518 while Government policies, rules and regulations had mean of 4.42 and SD 0.796.

4.4.2 Extent to which finances affected the strategic sustainability of MSMEs in Muthurwa marketThe researcher sought to examine the extent to which availability of finance affects the strategic sustainability of Micro, Small and Medium Size business enterprises.Table SEQ Table * ARABIC 12 Extent to which finances affected the strategic sustainability of MSMEs in Muthurwa marketCapital inadequacy Unavailability of loans from banks and other financial institutions Deficiency in working capital (funds to finance operations, pay overheads and debts when due) Cost of credit Acquisition of finances from non-formal lending firms like shylocks
105 105 105 105 105
Mean 3.3501 3.1824 3.1944 4.1909 3.8470
Std. Deviation .91355 .98123 .89578 .97363 .78075
Source: Researcher data, 2018
Table 12 above shows that finances affected the strategic sustainability of MSMEs in Muthurwa market. Out of maximum of 5 (extremely great extent), Capital inadequacy had mean of 3.35 and standard deviation 0.91355; unavailability of loans from banks and other financial institutions 3.182, standard deviation 0.98123; Cost of credit 4.19, and standard deviation of .97363; Deficiency in working capital (funds to finance operations, pay overheads and debts when due mean of 3.8470 with standard deviation of 0.97769 and acquisition of finances from non-formal lending firms like shylocks 3.85 with standard deviation of .78075. Hence finances greatly affected the strategic sustainability of MSMEs in Muthurwa market.

4.5 Technological development and strategic sustainability of MSMEs in Muthurwa market.The study sought to identify the type of electronic gadget(s) that MSMEs traders to access technology to run their business.
Table SEQ Table * ARABIC 13 Electronic gadget(s) that MSMEs traders to access technologyElectronic Gadget Percentage
Mobile Phone 96%
Laptop 29%
Desktop 15%
Ipad9%
Source: Researcher data 2018
From table 13 above, 96% of the respondents use mobile phones, 29% laptops, 15% desktops and 9% iPads. The researcher noted almost all the respondents’ uses mobile phones in addition to other electronic communication devices.

4.5.1 The level to which technology important in performing the following tasks in your business
The researcher aimed to establish the importance of technology in operating MSMEs in Muthurwa market in Nairobi. The results are tabulated below.

Table SEQ Table * ARABIC 14 The use of technology in MSMEsReduced the cost of operating business Ease communication and connectivity Improved accuracy Promotion of the business Improve efficiency and speed in operations Storage and retrieval of information
N 105 105 105 105 105 105
Mean 4.3727 3.3727 4.0909 4.1364 4.4273 3.0727
Std. Deviation .76546 .76457 .34655 .43846 .88265 .26088
Technological development affects strategic sustainability of MSMEs in Muthurwa market to great extent. Out of possible a mean of 5, Reduction of the cost of operating business had mean of 4.3727 and standard deviation of 0.76546, Easing communication and connectivity mean of 3.3727 and standard deviation of 0.76457, Improved accuracy mean of 4.0909 and standard deviation of 0.34655, Promotion of the business mean of 4.1364 and standard deviation of 0.43846, Improve efficiency and speed in operations mean of 4.0727 and standard deviation of 0.26088, Storage and retrieval of information mean of 3.3182 and standard deviation of 0.86663 as shown in table 14 above.

4.5.2 The extent technological development challenges the strategic sustainability of the businessThe researcher sought to establish the challenges faced by MSMEs traders in Muthurwa market in Nairobi in embracing the new technology and keeping abreast with technological development in the course of running and sustaining their businesses.

Table SEQ Table * ARABIC 15 Extent technological development challenges the strategic sustainability of the MSMEs in Muthurwa market.Cost of acquisition of laptops, desktop, ipad, mobile phone Inadequate training Cost of operating the technology- airtime, internet, traders Unfair business practices Fraud, cyber crime
N 105 105 105 105
Mean 4.2273 2.3364 4.4182 0.9023
Std. Deviation .86252 .56304 .9413 .66083
Source: Researcher data, 2018
Table 15 above shows technological development challenges the strategic sustainability of the MSMEs in Muthurwa market. Out of the possible maximum mean of 5 (Extremely great extent), Cost of acquisition of laptops, desktop, ipad, mobile phone had mean of 4.2273 that is low extent and standard deviation of 0.86252, Inadequate training mean of 2.3364 and SD 0.5304, Cost of operating the technology- airtime, internet, mean of 4.2182 and SD 0.9143, Unfair business practices Fraud, cyber crime mean of 0.9 and SD 0.66083. Hence technological developments neither affect strategic sustainability of the business nor improve performance of the traders.

4.6 Entrepreneurial Knowledge and Skills and strategic sustainability of MSMEs in Muthurwa Market Nairobi 4.6.1 Formally trained on entrepreneurship knowledge and skillsThe study aimed at examining whether the MSMEs traders had received formal training in entrepreneurship knowledge and skills
Table SEQ Table * ARABIC 16 Formal training on entrepreneurial knowledge and skills Frequency Percentage Cumulative Percent
Yes 27 25.7 25.7
No 78 74.3 100
Total 105 100.0 Source: Researcher Data 2018
Table 16 above indicate majority of the respondents had not acquired formal training in entrepreneurial knowledge and skills. Only 25.7% had acquired formal training while 74.3% had not acquired.
4.6.2 Extent entrepreneurial knowledge and skills challenges strategic sustainability of the business in Muthurwa market
The study seeks to establish the extent to which entrepreneurial knowledge and skills affects the strategic sustainability of the business in various operational functions as shown in the table below.

Table SEQ Table * ARABIC 17 Extent entrepreneurial knowledge and skills challenges strategic sustainability of the businessIdentification of business opportunities Conducting market research/ Conducting market research Financial management (budgeting, final financial statements- balance sheet Identification of possible and cheap capital Managing cash flow
Taking calculated risks
N 105 105 105 105 105 105
1 1 1 1 1 1
Mean 4.4909 3.2453 3.7853 3.8455 3.6983 3.6000
Std. Deviation .80986 .94684 .86301 .91055 .7539 .84810
Source: Researcher data, 2018
From the findings, majority of the respondents agreed entrepreneurial knowledge and skills challenges strategic sustainability of your business in Muthurwa market to great and moderate extent in the following functions; Identification of business opportunities (mean 4.45 and SD 0.8); Conducting market research/ Conducting market research (Mean 3.245; SD 0.946) and Financial management (budgeting, final financial statements- balance sheet (Mean 3.7853; SD deviation 0.945). Other functions such as Identification of possible and cheap capital (mean 3.5 and SD deviation 0.72), Managing cash flow (mean 3.8 and SD 0.91) and Taking calculated risks (mean 3.6 and SD 0.848).
4.7 Government assistance and strategic sustainability of MSMEsThe study sought to establish whether government assistance in provision of finance, infrastructure training, promotion and political instability affects strategic sustainability of MSMEs in Muthurwa market.
4.7.1 Extent of Government assist strategic sustainability of MSEs in Muthurwa market in Nairobi KenyaThe study sought to examine the extent to which government assist MSMEs trader in operating their business and how its assistance impact on strategic sustainability of the businesses in Muthurwa market.

Table SEQ Table * ARABIC 18 Government assistance of MSMEsAs shown in table 18 below, financial assistance through youth and women fund and government institutions had mean of 1.854 standard deviation .40952; Provision of infrastructure (roads, electricity, security, sewerage, water, among others) mean of 2.4521 standard deviation .50465; Training on managerial and technical skills and incubation centre mean of 1.5574 and standard deviation .51894; Political stability mean 2.3182 and standard deviation .57135; Promotion of the product through trade fairs and exhibitions had mean of 1.2355 and standard deviation .61690. Hence the extent to which the Government had assisted on strategic sustainability of MSMEs was low as shown in table above.

Financial assistance through youth and women fund and government institutions Providing infrastructure (roads, electricity, security, sewerage, water, etc) Training on managerial and technical skills and incubation centres Political stability Promotion of the product. Through trade fairs and exhibitions
N 105 105 105 105 105 110
1 1 1 1 1 1
Mean 1.854 2.4521 1.5574 2.3182 1.2355 Std. Deviation .40952 .50465 .51894 .57135 .61690 Source: Researcher data, 2018
4.7.2 Effects of government activities, policies, laws and regulation in strategic sustainability of MSMEs in Muthurwa market.
Government policy, rules and regulation influences the strategic sustainability of MSMEs in Muthurwa Market to great extent. Out of possible a mean of 5, Taxes had mean of 4.2527 and standard deviation of 0.74906, Licences mean of 3.3837 and standard deviation of 0.75427, Quality standard control mean of 4.0909 and standard deviation of 0.74655, Price control mean of 4.1364 and standard deviation of 0.81446, Zoning mean of 3.3252 and standard deviation of .85157, Weight and measure control mean of 3.0727 and standard deviation of .76388 as shown in table 19 below.

Table SEQ Table * ARABIC 19 Effect of Government policy on strategic sustainability MSMEs in Muthurwa market.Taxes Licences Quality standard control Price control Zoning
Weight and measure control
N 105 105 105 105 105 105
Mean 4.2527 3.3837 4.0909 4.1364 3.3252 3.0727
Std. Deviation .74906 .75427 .74655 .81446 .85157 .76388
Source: Researcher data, 2018
4.8 Other factors affect the strategic sustainability of business in Muthurwa market.The study sought to identify the other factors that affect strategic sustainability of the MSMEs in Muthurwa market apart from finance, technology changes, government policies and regulations as well as entrepreneurial knowledge and skills. Using content analysis qualitative method, the following factors were identified. The included competition among businesses and hawkers who operates in Nairobi town center and its environs; high fees levied by the Nairobi county council for services which are either not rendered or are insufficient; security both during the day and at night due to inadequate police officers patrolling the market , molestation from Nairobi city county officials, water supply especially to the food vendors and those dealing with agricultural products; poor lighting which makes it impossible for traders to operate at night; accessibility to the market by customers resulting from its location and poor infrastructure in the market.

Fluctuation of currency, high customs duties and bureaucracy also affects those import their product from foreign countries notably from China.
4.9 Inferential StatisticsInferential statistics were used to make predictions from the collected data and generalize it to all MSMEs traders at Muthurwa market in Nairobi Kenya.

4.9.1 Pearson Correlation AnalysisThe study used Pearson correlation analysis to determine the strength of association between the independent variables and the dependent variable. Pearson moment correlation was conducted using SSPS package version 21. The tabulation below shows that there is a strong positive relationship between the strategic sustainability of MSMEs in Muthurwa Market and Finances for the traders which had correlation coefficient factor of 0.754 and significance value of 0.000. This relationship was found to be statistically significant as significant value of 0.000 was below the level of significance of 0.05 (0.01 level (2- tailed test). The study also found a strong positive correlation between entrepreneurial knowledge and skills, and strategic sustainability of MSMEs in Muthurwa Market with correlation coefficient factor of 0.747, the significance value was 0.000 which was below 0.005. Changes in technological development and Government policies, rules and regulations also showed strong positive relationship on influencing strategic sustainability of MSMEs in Muthurwa Market with correlation coefficient factor of 0.813 and 0.935 respectively. Both were statistically significant as their significance value was 0.000 which was below 0.05.

Table SEQ Table * ARABIC 20 CorrelationsStrategic sustainability of MSMS in Muthurwa market Finances Entrepreneurial knowledge and skills Changes in technology Government policies, rules and regulations Government policies, rules and regulations
strategic sustainability of MSMS in Muthurwa market
Finances Pearson Correlation
Sig. (2-tailed) 1 .754** .000 .747**
.000 .813**
.000 .935**
.000
Pearson Correlation
Sig. (2-tailed) .754**

.643**
.000 .563**
.000 .605**
.000 .754**
.000
Entrepreneurial knowledge and skills Pearson Correlation .747** 1 1 .507** .613**
Sig. (2-tailed) .000 .000 .000
Changes in technology Pearson Correlation .813** .619** .507** 1 .840**
Sig. (2-tailed) .000 .000 .000 .000
Government policies, rules and regulations Pearson Correlation .935** .719** .613** .840** 1
Sig. (2-tailed) .000 .000 .000 .000 **. Correlation is significant at the 0.01 level (2-tailed).

b. List-wise N=110
Source: Researcher data, 2018
4.9.2 Regression AnalysisThe researcher used multiple regression analysis statistical technique to measure the influence or the impact of the independent variables on dependent.

Table SEQ Table * ARABIC 21 Model SummaryModel R R Square Adjusted R Square Std. Error of the Estimate
1 .873a .801 .782 .56601
Source: Researcher data, 2018
The researcher used Coefficient of determination to examine the extent to which the model used in the study fitted the data. As shown from table above, the model fit was 80.1% as shown by squared (R2). 78.2% of the variation in strategic sustainability of MSMEs in Muthurwa Marke had been explained by explanatory variables used in the study as indicated above by adjusted R2. Hence the variations in strategic sustainability of MSMS in Muthurwa market had been explained by explanatory variables such as availability finances, entrepreneurial knowledge and skills, technological development and Government policies, rules and regulations.

4.9.3 CoefficientsTable SEQ Table * ARABIC 22 CoefficientsModel Unstandardized Coefficients Standardized Coefficients T Sig.

B Std. Error Beta (Constant)
Availability of finances
Technological development
Entrepreneurial knowledge and skills -1.203
.738
.482
.521 1.7438
.039
.041
.029 .413
.291
.312 79.23
13.629
73.21 .000
.000
.000
Government policies .701 .057 .587 28.451 .000
Source: Researcher Data, 2018
The coefficients of equation (Y = ?0 + ?1X1 + ?2X2 + ?3X3 + ?4X4 +?) as generated by SSPS output was:
Y= -1.2 + 0.738X1 + 0.482X2 + 0.521X3 + 0.701X4 + 1.7438
Regression analysis revealed a unit change in availability of finance while holding all other factors constant affect strategic sustainability of MSMEs by coefficient factor 0.738; a unit change in technological development while holding all other factors constant would all other factors constant challenge strategic sustainability of MSMEs by coefficient factor 0.482; a unit change in level of entrepreneurial knowledge and skills holding all other factors constant would enhance strategic sustainability of MSMEs by coefficient factor 0.52; while a unit improvement in government policies while holding all other factors constant improve strategic sustainability of MSMEs by coefficient factor 0.701. Hence all the four factors in the study have direct influence on strategic sustainability of MSMEs in Muthurwa market in Kenya.

4.7 Summary of the ChapterThe researcher used descriptive statistics of frequency and percentages to analyses background information which included demographic information (male or female), age distribution, highest level of education attained, job designation and their departments, length of period respondents had traded in Muthurwa Market. Mean and standard deviation were used to analyze data related to the extent and the importance to which finances for the traders, changes in technological development, entrepreneurial knowledge and skills and Government policies, rules and regulations influence the strategic sustainability of MSMEs in Muthurwa Market. The researcher had used a likert scale of 1 to 5 with 5 being the maximum and 1 the minimum. That is 5 represented extremely great extent; 4- Great extent; 3- Moderate extent; 2- Low extent and 1- I don’t know or least extent. Inferential statistics such as 2 tailed person correlation with 0.01 level of significance was used to evaluate the strength of relationship among variables and whether the positively or negatively contribute towards the strength of variables. Regression analysis was used to determine whether the model used in the study fitted the data collected.

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION5.1 IntroductionThis chapter dealt with the summary of the findings, conclusion, recommendations, limitation of the study and the recommendations for further studies. The aim was to establish whether the study was able to achieve its objectives which were to evaluate the extent to which availability of finance, technological development, entrepreneurial skills and government policies and laws challenges strategic sustainability of MSMEs in Kenya.

5.2 Summary of the study5.2.1 Background informationOut of 148 questionnaires issued 117 representing 80% were returned duly filled. 12 questionnaires were rejected because they were either not complete or were inconsistent hence not eligible for analysis. Hence 105 questionnaires amounting to approximately 71% were analyzed. 71 respondents were male while 34 were female representing 67.7% and 32.3% of all the respondents respectively. 21.9% of the traders were dealing with Grocery shops (agricultural products), 38.1% from boutiques (New, Second hand clothes and shoes), 9.5% from Beauty parlors with salons and barber shops, 8.1% from bouquet/floristry shops, 4.8% from Gift Shops, 5.7% from Money transfer agents, 6.3% Cyber Cafes and 4.5% from Ready Food store (hotels and butcheries). 2.9% of the respondents were below 24 years, 6.7% between the age of 21 to 25 years, 13.3% between 31 to 35 years, 35.2% 36 to 40 years, 35.2% between 35 to 44 years and 6% between 45 to 50 years. There was no respondent above 50 years. 14.3% of the respondents had attained Kenya Certificate of Primary Education as the highest level of education, 68.6% had Kenya Certificate of Secondary Education, 12.4% had undergone Certificates and Diploma courses, bachelor’s degree and above 4.7%. 5.6% of the respondents had traded for a period below 1 year in Muthurwa Market. 10.4% have worked between 1 to 4 years, 25.6% between 5 to 9 years, 33.2% 10 to 15 years, 20.5% 15 to 19 years and 4.7% above 19 years. 21.9% had no employee(s), 48.6% of the respondents had employed between 1-5 employees, 17.1% 6-10 employees, 8.6% and 3.8% had employed between 10- 15 employees and over 16 respectively.

5.2.2 Extent to which inadequate finances affect strategic sustainability of MSMEs in Kenya.
97.7% of the respondents agreed inadequate finances challenges strategic sustainability of MSMEs in Muthurwa market in Nairobi, Kenya while 2.3% disagreed. It also affects strategic sustainability of MSMEs to great extent with mean of mean of 4.25 and SD 0.709 in the following operations. Out of maximum of 5 (extremely great extent), inadequacy capital had mean of 4.35 and standard deviation 0.91355; unavailability of loans from banks and other financial institutions 4.182, standard deviation 0.98123; Cost of credit 4.19, and standard deviation of .97363; Deficiency in working capital (funds to finance operations, pay overheads and debts when due mean of 3.8470 with standard deviation of 0.97769 and acquisition of finances from non-formal lending firms like shylocks 3.85 with standard deviation of .78075. Pearson correlation analysis showed there is a strong positive relationship between the strategic sustainability of MSMEs in Muthurwa Market and Finances for the traders which had correlation coefficient factor of 0.754 and significance value of 0.000. This relationship was found to be statistically significant as significant value of 0.000 was below the level of significance of 0.05 (0.01 level (2- tailed test). Regression analysis revealed a unit change in availability of finance while holding all other factors constant affect strategic sustainability of MSMEs by coefficient factor 0.738.

5.2.3 Effects of technology on strategic sustainability of MSMEs in Kenya.
63.7% of the respondents agreed technological development challenges strategic sustainability of MSMEs in Muthurwa market in Nairobi, Kenya while 36.3% disagreed. Technological development affects strategic sustainability of MSMEs in Muthurwa market to great extent with mean of 3.65 and SD 0.8506. All respondents used electronic gadgets to access technology with 96% of the respondents using mobile phones, 29% laptops, 15% desktops and 9% iPads. It also helps MSMEs traders to improve its operations with reduction of the cost of operating business had of mean of 4.3727; ease in communication and connectivity mean of 4.3727; improved accuracy had a mean of 3.0909, promotion of the business mean of 4.1364, improve efficiency and speed in operations mean of 4.0727 and storage and retrieval of information mean of 3.3182. Technological challenges the strategic sustainability of the MSMEs in Muthurwa market. Out of the possible maximum mean of 5 (Extremely great extent), Cost of acquisition Electronic gadgets had mean of 4.2273 and standard deviation of 0.86252, Inadequate training mean of 2.3364 and SD 0.5304, Cost of operating the technology- airtime, internet, mean of 4.2182 and SD 0.9143, Unfair business practices Fraud, cyber crime had a mean of 0.9 and SD 0.66083. Using Pearson correlation analysis, the researcher found a strong positive correlation between entrepreneurial knowledge and skills, and strategic sustainability of MSMEs in Muthurwa Market with correlation coefficient factor of 0.813, the significance value was 0.000 which was below 0.005. Regression analysis revealed a unit change in technological development while holding all other factors constant would all other factors constant challenge strategic sustainability of MSMEs by coefficient factor 0.482.

5.2.4 Extent entrepreneurial skills challenges strategic sustainability of MSMEs in Kenya.
79.1% of the respondents agreed Entrepreneurial knowledge and skills challenges strategic sustainability of MSMEs in Muthurwa market in Nairobi, Kenya while 20.9% disagreed. Only 25.7% had acquired formal training while 74.3% had not acquired. From the findings, entrepreneurial knowledge and skills challenges strategic sustainability of MSMEs to great and moderate extent in the following functions; Identification of business opportunities (mean 4.45 and SD 0.8); Conducting market research/ Conducting market research (Mean 3.245; SD 0.946), Financial management (budgeting, final financial statements- balance sheet (Mean 3.7853; SD deviation 0.945). Other functions such as Identification of possible and source of cheap capital (mean 3.5 and SD deviation 0.72), managing cash flow (mean 3.8 and SD 0.91) and taking calculated risks (mean 3.6 and SD 0.848). The study also found a strong positive correlation between entrepreneurial knowledge and skills, and strategic sustainability of MSMEs in Muthurwa Market with correlation coefficient factor of 0.747, the significance value was 0.000 which was below 0.005. Regression analysis revealed a unit change in level of entrepreneurial knowledge and skills holding all other factors constant would enhance strategic sustainability of MSMEs by coefficient factor 0.52.

5.2.5 Impact of government policies on strategic sustainability of MSMEs in Kenya95.5% of the respondents agreed government policies, rules and regulations challenges strategic sustainability of MSMEs in Muthurwa market in Nairobi, Kenya while 4.5% disagreed. Government policy had mean of 4.42 and SD 0.796 out of the possible 5. The effect of the government on the strategic sustainability of MSMEs in Muthurwa Market through taxes had mean of 4.2527, licences mean of 3.3837, Quality standard control mean of 4.0909, price control mean of 4.1364, zzoning mean of 3.3252 and weight and measure control mean of 3.0727 all out of possible 5 (extremely great extent). Pearson correlation analysis showed there was a very strong positive relationship between the strategic sustainability of MSMEs in Muthurwa Market and Government policies for the traders which had correlation coefficient factor of 0.935 and significance value of 0.000. This relationship was found to be statistically significant as significant value of 0.000 was below the level of significance of 0.05. Regression analysis revealed a unit improvement in government policies while holding all other factors constant improve strategic sustainability of MSMEs by coefficient factor 0.701.

5.3 Conclusion of the study5.3.1 Background informationThe study concluded most of MSMEs traders in Kenya are male with 67.7% as opposed to 32.5% female. Most traders deal with boutiques (New Second hand clothes and shoes) followed by agricultural products and grocery shops. Other businesses such as beauty parlors with salons and barber shops, bouquet/ floristry shops, Gift Shops, Money transfer agents, Cyber Cafes and ready Food store (hotels and butcheries) had each less than 10%. Majority of the traders were between 31 to 40 years amounting to approximately 72%. 22% were below 30 years while 6% above 40 years. 87% of the trader had attained Kenya Certificate of Secondary Education and above while 90 % had traded in Muthurwa market for over 5 years. Hence majority of the respondents were literate and would be able to read, understand and answer the questions correctly and they had been in the Muthurwa market for a considerably long period of time to be acquainted with various challenges affecting traders in the market. All the traders in Muthurwa market operate MSMEs since none of the business had employed over 20 employees. 22% had no employee(s).

5.3.2 Extent to which availability of finance affects strategic sustainability of MSMEs in Kenya.
The study concluded majority of market traders in Kenya are faced with financial challenges while trying to sustain their business. Pearson correlation analysis showed a strong relationship between the strategic sustainability of MSMEs and finances which had correlation coefficient factor of 0.754. Regression analysis revealed a unit change in availability of finance while holding all other factors constant improve strategic sustainability of MSMEs by coefficient factor 0.738. The study concluded inadequate capital, unavailability of loans from banks and other financial, cost of credit, deficiency in working capital (funds to finance operations, payment of overheads and debts when due, and acquisition of finances from non-formal lending firms like shylocks have negatively affected strategic sustainability of MSMEs in Kenya.
5.3.3 Effects of technology on strategic sustainability of MSMEs in Kenya.
Majority of the respondents agreed changes in technology challenges strategic sustainability of MSMEs in Muthurwa market in Nairobi, Kenya. Almost all MSMEs traders use electronic gadgets such as mobile phones, laptops, desktops and Ipads to access technology. It also helps them to improve their operations by reducing the cost of operating business, ease in communication and connectivity, improved accuracy, promotion of the business, improve efficiency and speed as well as storing and retrieving information. Technological advancement challenges the strategic sustainability of the MSMEs in Kenya due to cost of acquisition electronic gadgets, inadequate training, cost of operating the technology (airtime, internet) and unfair business practices (fraud, cyber-crime). Using Pearson correlation analysis, the researcher found a strong positive correlation between changes in technology and strategic sustainability of MSMEs in Kenya with correlation coefficient factor of 0.813, the significance value was 0.000 which was below 0.005. From regression equation, a unit change in technological development while holding all other factors constant would challenge strategic sustainability of MSMEs by coefficient factor 0.482.

5.3.4 Extent entrepreneurial skills challenges strategic sustainability of MSMEs in Kenya.
From the findings, inadequate entrepreneurial knowledge and skills challenges strategic sustainability of MSMEs in Kenya. Majority of MSMEs traders had not acquired any entrepreneurial formal training; only 25.7% had acquired formal training. Lack of entrepreneurial knowledge and skills limits the traders’ ability to conduct business operations such as market research, financial management (budgeting, final financial statements- balance sheet), and identification of possible source of cheap capital, managing cash flow and taking calculated risks. The study also found a unit change in level of entrepreneurial knowledge and skills while holding all other factors constant would enhance strategic sustainability of MSMEs by factor 0.52. Hence there is a strong positive correlation between improvement of the level of entrepreneurial knowledge and skills, and strategic sustainability of MSMEs in as shown in the study (coefficient factor of 0.747).
5.3.5 Impact of government policies on strategic sustainability of MSMEs in KenyaGovernment policies, rules and regulations challenge strategic sustainability of MSMEs in Kenya. Government affects the strategic sustainability of MSMEs through taxes, quality standard control and price control to a very great extent while licencing, zoning and weight and measure control to moderate extent. The study concluded there had been minimal government support to MSMEs through provision of financial assistance through youth and women fund and other financial institutions, provision of infrastructure (roads, electricity, security, sewerage, water, among others), training on managerial and technical skills and incubation centre, political stability and promotion of the product. From the regression analysis a unit improvement in government policies while holding all other factors constant improve strategic sustainability of MSMEs by coefficient factor 0.701. Pearson correlation analysis showed there was a very strong positive relationship between the challenges facing MSMEs traders in Kenya and government policies with correlation coefficient factor of 0.935.
5.4 Recommendation of the studyThe study recommended for any MSME in Kenya to survive, it should have adequate capital. Entrepreneurs should improvise ways and means of accessing finance to keep their MSMEs afloat. The government of Kenya should come in handy to provide funds to the traders of MSMEs through youth development funds since the majority of traders are within the youth bracket (18 to 35 years). Government should also assist women entrepreneurs through women fund. Banks and other financial institutions should be encouraged to lend MSMEs money without stringent conditions and at a reasonable cost. This would enable MSMEs traders to avoid seeking finance from informal financial sectors such as shylocks which are quick to lend them money but at a very high cost and unreasonable terms.

MSMEs should be encouraged to acquire entrepreneurial knowledge and skills from established institutions and experienced professionals. Entrepreneurial empowerment programs/institutions should be established to organize workshops, seminars and short courses for the existing and aspiring MSMEs traders. This should be coupled by provision of study materials to guide entrepreneurs on how to conduct market analysis and research, identify business opportunities calculate the risks, develop a business plan, budget, and manage cash flow and working capital. This is important since they will be able to overcome some those issues which deter the success of their businesses. Establishment of incubation centers for both existing and aspiring entrepreneurs was also recommended.

The study also found technology has hampered the strategic sustainability of their businesses. The cost of acquiring of electronic gadgets, cost and the knowledge of using it being the major deterrents despite the traders having adequate knowledge of usefulness of technology in running the business. The study recommended more than the government training the MSMEs traders on entrepreneurial knowledge and skills it is crucial for them to acquire basic technological skills of promoting their products and operating their businesses. The government should also lower taxes on electronic gadgets to make them affordable or provide a facility where they can acquire them on loans with convenient repayment terms.

The study also recommended national and county government should provide a conducive business atmosphere for MSMEs to survive. It should lower or waive licensing fee and provide for essential services and facilities such as lightings, water, security and basic infrastructure. The national government should also lower the customs it levies on MSMEs traders who import their wares from abroad and reduce bottlenecks and bureaucracy associated with the same.

5.5 Limitation of the studyIn the course of conducting the study, the researcher experienced various challenges. Some respondents were too reluctant to take the questionnaires since they felt it had no significant importance to them. Others did not return questionnaires even after the researcher doing a lot of follow-up. Some questionnaires returned were incomplete while others very inconsistent hence they could not be analyzed. Excessive raining also made the researcher spend a lot of time and money to access the respondents. More to that some respondents were always very busy and out of the premises. The researcher had to be very patient to get them.

5.6 Recommendation for further studies
Further studies can be conducted on other markets outside Nairobi to assess whether the results can concur with the study findings. More analysis can also be done on individual factor discussed above. Others factors which were cited by the MSMEs traders that affect the strategic sustainability of their businesses such as security, high fees levied by the Nairobi county; molestation by county officials, water supply, poor lighting, customer accessibility to the market and poor infrastructure in the market can also be examined in detail.

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APPENDIX I – Letter of introductionPeter Mwaura Njogu
PO BOX 473- 00902,
Kikuyu.
20th March 2017.
Directorate,
Nairobi County Government,
Nairobi-Kenya
REF: REQUEST FOR COLLECTING DATA FOR MY RESEARCH PROJECT
Dear Sir/Madam,
I am bone fide Masters Student of Presbyterian University of East Africa. I am carrying out a research on Assessment of the challenges facing the SMEs in Kenya through a case study of Muthurwa Market. The project is done in partial fulfillment of the requirement for the Masters in Business Administration (MBA-Strategic Management Option) at Presbyterian University of East Africa, Nairobi.
I hereby kindly request your assist based to conduct my research on your Organization to collect data which are relevant to my academic project. The responses you provide in this questionnaire will be treated as confidential and will be used strictly for academic purposes only. Your assistant will be highly appreciated.
Yours faithfully,
Peter Mwaura Njogu
APPENDIX 2: QuestionnaireInstruction: please tick where appropriate in the bracket or provided space.

Section one: Demographic Information
Gender: Male ( ) Female ( )
What is your age bracket? (Tick where appropriate).

20 years and below ( )21- 25 years ( ) 26- 30 years ( )31-35 years ( )
36-40 years ( )41- 45 years ( ) 46-50 years ( ) Above 51 years
Tick on the table below the kind of business you conduct at Muthurwa market
Grocery shops (agricultural products- grains, flour, fruits, legumes, etc) Boutiques (New, Second hand clothes and shoes) Beauty parlors with salons and barber shops; Bouquet/ floristry shops Gift Shops; Money transfer agents (Mpesa, Airtel money bank agent,etc) Cyber Cafes Ready Food store (hotels, butcheries, food vending, etc) Others …………………………………………………………………………..Indicate your highest level of education; please tick where appropriate.

Primary school ( ); Secondary school ( ); college certificate ( ); Diploma ( ); Bachelor degree ( ); Master’s degree ( ); Post Graduate Degree and above ( )
Others: ……………………………………………………………
In the space provided below please tick for how long you have conducted business at Muthurwa market.
Below 1 year ( ); 1 to 2 years ( ); 3 years- 5 years ( ); 7years to 9 years ( ); 10 years and above ( )
In the space provided, kindly indicate the number of employees in your business
…………………………..

SECTION 2: Challenges facing strategic sustainability of MSMEs in Kenya
(i) Does the following factors affects the strategic sustainability of your business (Tick where appropriate)
a) Finances Yes No
b) Entrepreneurial knowledge and skills Yes No
c) Changes in technology Yes No
d) Government policies, rules and regulations Yes No
(ii) To what extent does the following affects strategic sustainability of your business in Muthurwa market?
Question Extremely great extent Great extent Moderate extent Low extent I don’t know
Finances Technological development Entrepreneurial knowledge and skills Government policies, rules and regulations SECTION 3
To what extent has finances affected the strategic sustainability in the areas indicated below.

Question Extremely great extent Great extent Moderate extent Low extent I don’t know
Capital inadequacy Inavailability of loans from banks and other financial institutions Cost of credit Deficiency in working capital (funds to finance operations, pay overheads and debts when due) Acquisition of finances from non-formal lending firms like shylocks Other financial challenges please indicate in the space provided below:
……………………………………………………………………………………………………………………………………………………………………………………………………
Technological development and strategic sustainability of MSMEs in Muthurwa market.

Please indicate the type of electronic gadget(s) that help you to access technology to run your business. (Tick where appropriate)
Mobile phone ( )laptop ( ) desktop ( )ipad ( )
To what level is technology important in performing the following tasks in your business?
Question Extremely important Very important Important Fairly important Not important
Reduced the cost of operating business Ease communication and connectivity Improved accuracy Promotion of the business Improve efficiency and speed in operations Storage and retrieval of information To what extent have technological development challenges the strategic sustainability of your business in the following areas?
Question Extremely great extent Great extent Moderate extent Low extent I don’t know
Cost of acquisition of laptops, desktop, ipad, mobile phone Cost of operating the technology- airtime, internet, employees Inadequate training Business privacy Unfair business practices
Fraud, cyber crime (C) Entrepreneurial Knowledge and Skills
(i) Have you been formally trained on entrepreneurship?
Yes ( ) No ( )
(ii) To what extent does the entrepreneurial knowledge and skills challenges strategic sustainability of your business in Muthurwa market in the following areas?
Question Extremely great extent Great extent Moderate extent Low extent I don’t know
Identification of business opportunities Conducting market research Developing business plan Identification of possible and cheap capital Financial management (budgeting, final financial statements- balance sheet Managing cash flow Taking calculated risks Effects of government activities, policies, laws and regulation in strategic sustainability of MSEs in Muthurwa market.
To what extent does the government assist strategic sustainability of MSEs in Muthurwa market in Nairobi Kenya? Use the scale 5- Extremely great Extent, 4-Great extent, 3-Moderate extent, 2-Low extent and 1- I don’t know
Question I don’t know Low extent Moderate extent Great extent Extremely great Extent
Financial assistance through youth and women fund and government institutions Providing infrastructure (roads, electricity, security, sewerage, water, etc) Training on managerial and technical skills and incubation centres Promotion of the product. Through trade fairs and exhibitions Political stability To what extent does the following government and county activities, policies, laws and regulations challenges strategic sustainability of your business in Muthurwa market? (Tick where appropriate)
Question Extremely great Extent Great extent Moderate extent Low extent I don’t know
Taxes Licences Quality standard control Price control N
Zoning
Weight and measure control SECTION 4: According to your view, which other factors affects the strategic sustainability of your business in Muthurwa market.

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………APPENDIX 3: BudgetBelow is a summary of estimates of the total budget required in completing the research project;
Activity Amount
Stationary/ Binding 5000
Printing/ Photocopying 2000
Typing/ Software SPSS use 5000
Travel Expenses 2500
Research assistants 3 @ Ksh 1000 per person 3000
Contingencies 3000
TOTAL 25500
Source: Author 2018APPENDIX 4: Work planFebruary 2018 March 2018 April 2018May 2018
Proposal writing Pre-testing Data collection Data analysis Project presentation Source: Author 2018