Networks, Micro and Small Enterprises (MSE's) and Performance in Kenya

Abstract

Small and Micro Enterprise in Kenya as well as in the other developing economies are faced with serious challenges in their growth and productivity path. The most appropriate and manageable route to growth and survival lies in networking. This paper examines the role of informal personal networks in determining Micro Small Enterprises (MSE's) success in Kenya. It adopts the network perspective theoretical approach. Empirically, the paper finds that MSE's in Kenya get around market failures and lack of formal institutions through entrepreneurial personal network as a copying strategy in the process of global transformation to bridge the entrepreneurial global divide. General hypothesis predicting the 'likelihood of MSE's with better network performing better' is supported by performance models though pro-poor growth is evident with an average business performance. Network strategies to promote small enterprises are recommended to policy makers, donors and actors in the field against those of the failed traditional strategies. However, there are few empirical studies available in this area particularly in less developed countries; therefore further research is necessary in this direction.