Government interventions and performance of micro and small enterprises in the manufacturing sector in Mombasa County, Kenya

Abstract

Micro and Small Enterprises (MSEs) segment has been recognized worldwide for its role in wealth generation, employment establishment, and poverty reduction. Nevertheless, there is an increasing inability of Small-Scale enterprises to access government support, which leads to failure to meet expected achievements as the engine for economic growth and development despite government encouragement in this direction. As a result, the aim of this research is to determine the significanceiofigovernment initiatives onitheiperformanceiofimicro and small businesses in Mombasa County, Kenya. General and specific objectives guided the study. In this study, the specific objectives were to determine how tax subsidies affected the performance of micro and small manufacturers in Mombasa County, Kenya; to investigate the influence of training on the performance of micro and small enterprises in the manufacturing sector in Mombasa Count, Kenya; to examine the influence of financing on the performance of micro and small enterprises in the manufacturing sector in Mombasa County, Kenya and to investigate the influence of market linkages on the performance of micro and small enterprises in the manufacturing sector in Mombasa County, Kenya. This study adopted a number of theories to support for the conceptual framework; these are balanced scorecard, stakeholders, resource-based perspective, and agency theory. Descriptive research design was used in this study. The study primarily focused on micro and small businesses in the manufacturing sector in Mombasa County, Kenya, and since the target population was sixty six (66) making it to be insufficient to draw a statistical sample, a census was used as sampling design to establish an appropriate sample size based on the target population. Several open-ended questions and a modified Likert scale questionnaire were used. To develop the instrument, a feasibility study was conducted. Validity test was done using factor Kaiser-Mayor-Oklin (KMO) and Bartlett's1Test of the study ten samples were administered verify if it depicts the phenomenon understudy. Cronbach's alpha was used to assess the quality and reliability of the study. Statistical Package for Social Science (SPSS Version 25) , Analysis of Variation (ANOVA) and descriptive statistics were used to analyze data. The analyses were carried out with the help of frequency counts, percentages, means, standard deviations, regressions, and correlations, and the results were presented as graphs, charts, and tables. Based on the study, there is a strong correlation between government funding and performance of micro and small enterprises operating in the manufacturing sector in Mombasa County. The study concluded that government financing affects performance of micro and small enterprises in manufacturing sector in Mombasa County. The recommendation of the study was that, the government tax agency should provide micro and small enterprises in the manufacturing industry with tax rebates and reduce or remove VAT on materials used by manufacturing MSEs in the production processes; that governing agencies should collaborate with training institutions to offer quality entrepreneurial1 training1 to1 micro1 and1small1enterprises1to leverage on the new developments; that government through various agencies to increase direct financing through collaborations with international organizations and through the ministry of industry and enterprise development , the micro and small enterprises should be linked with markets to be able to sale their products and service both local and overseas.