Determinants of performance of internet cyber cafes in Nairobi Province
Masika, Alexander Opicha
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The informal sector has been recognized for its role in contributing towards national output and employment. In particular, the information and communication technology (lCT) sector has become a vital part in its contribution to the economy. In Kenya, especially the urban centers, the ICT sector has been recording a significant change facilitated by the Internet. This has been possible due to the proliferation of Internet cyber cafes that provide access to the Internet at a minimum cost. This research paper analyzed the performance of the Internet cyber cafes in Nairobi province. A total of 70 cyber cafes from Nairobi were selected using the two-stage cluster sampling technique out of which four (4) cyber cafes were identified as outliers and hence the sample population was reduced to 66 cases. The data was analyzed using both descriptive statistics and the use of an econometric model. Performance of the cyber cafes was measured by output per month in terms of total hours used on the Internet by the customers and was regressed against explanatory variables. These explanatory variables included; monthly rent, cost of maintenance of computers per month, distance between the cyber cafes, age of the cyber cafe, total wages paid to the employees per month and the total hours of operation per month. The regression results revealed that rent (bigger space) was the most statistically significant variable in determining the performance of the cyber cafes. Other factors that significantly affect output are the age of the cyber cafe and total hours of operation per month. Based on the findings of the study, it is recommended that the cyber cafes should be encouraged to expand their services which in turn would result in increased employment opportunities. This could be achieved by expanding business space in the province that will enable the cafes to acquire more equipment and thus hire more labour and as a result increase their respective output. The government should also ensure that high security measures are attained and maintained to encourage the cyber cafes to operate for longer hours which in turn will generate higher output levels.