top of page
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Economics and Business

Quarterly Reviews

ISSN 2775-9237 (Online)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
crossref
doi
open access

Published: 17 November 2022

Growth of Youth-Owned Micro and Small Enterprises in Kigali City, Rwanda: What is the Role of Government Entrepreneurial Interventions?

Benjamin Niyonsaba, Stephen M.A Muathe, Mary Namusonge

Kenyatta University, Kenya

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, management journal

Download Full-Text Pdf

doi

10.31014/aior.1992.05.04.469

Pages: 190-204

Keywords: Government Entrepreneurial Interventions, Growth of Youth Owned MSEs, Resource Based Review, Rwanda

Abstract

Micro and Small Enterprises are major players in the wealth of nations, and therefore various entrepreneurial interventions were launched for boosting the economies and standards of living by creating employment opportunities and profits. However, these MSEs have experienced some problems which lessen their growth. The objective of the research was to investigate the effect of government interventions on the growth of youth-owned MSEs in Kigali City, Rwanda. The study was anchored on the resource-based view, Gibb’s support theory, adoption theory, and growth of a firm theory/ Explanatory and descriptive research designs were adopted. The sample was 154 respondents drawn from three districts of Kigali city with a population of 252 youth-owned MSEs. Data was collected using a questionnaire and analyzed using multiple linear regression analysis. The study concludes that entrepreneurial training, access to credit, technology-based online social media, and market access effectively influenced the growth of MSEs in Kigali City, Rwanda. The study recommended that government entrepreneurial interventions should be effectively factored into policy-making and program implementation for sufficient growth of MSEs. MSEs should adopt technology-based online social media to market their products to the global market beyond the Rwanda boundary. Moreover it’s an effective management tool for customer relations for online business.

References

  1. Abay, H. H., Temanu, F. G., & Gebreegziabher, A. H. (2015). Owner factors affecting the growth of micro and small enterprises (MSEs) in Ethiopia: a case study in shire Indaselassie Town, Tigray. Clear International Journal of Research in Commerce & Management, 6 (5), 1-24.

  2. Acquah, A., M. & Mansah I. (2021). Re-examining the causal relationships among FDI, economic growth and financial sector development in Africa. International Review of Applied Economics, 35(1), 45-63.

  3. Aidara, S., Mamun, A. A., Nasir, N. A. M., Mohiuddin, M., Nawi, N. C., & Zainol, N. R., (2021). Competitive advantages of the relationship between entrepreneurial competencies and economic sustainability performance. Sustainability, 13 (2), 864-888.

  4. Alene, E. T. (2020). Determinants that influence the performance of women entrepreneurs in micro and small enterprises in Ethiopia. Journal of Innovation and Entrepreneurship, 9 (1), 1-20.

  5. Ali, S., Bilal, H., Ahmad, A., & Hussain, J. (2020). Major Barriers to Manufacturing SMEs Growth and Survival: Evidence from Emerging Economy Pakistan. Review of Economics and Development Studies, 6 (4), 845-856.

  6. Alvarez, S. A., & Busenitz, L. W. (2001). The entrepreneurship of resource-based theory. Journal of management, 27 (6), 755-775.

  7. Amarteifio, E. N. A., & Agbeblewu, S. (2017). Level of education, business experience and small and medium enterprise performance in the Accra Metropolis of Ghana. International Journal of Multidisciplinary and Current Research, 1 (5), 1460-1466.

  8. Andaregie, A., Worku, A., Getachew, B., Fentahun, Y., & Astatkie, T. (2022). Determinants of Micro and Small Enterprises’ (MSEs) growth in northwest Ethiopia. Development in Practice, 32(1), 39-51.

  9. Anyanwu, J. C. (2013). Characteristics and macroeconomic determinants of youth employment in Africa. African Development Review, 25(2), 107-129.

  10. Appel, G., Grewal, L., Hadi, R., & Stephen, A. T. (2020). The future of social media in marketing. Journal of the Academy of Marketing Science, 48(1), 79-95.

  11. Ardjouman, D. (2014). Factors influencing small and medium enterprises (SMEs) in adoption and use of technology in Cote D'ivoire. International Journal of Business and Management, 9 (8), 179-197.

  12. Barney JB (2001). Is the resource-based “view” a useful perspective for strategic management research? Yes. Acad. Manage. Rev. 26(1):41- 56.

  13. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of management, 17(1), 99-120.

  14. Birley, S., & Westhead, P. (1990). Growth and performance contrasts between ‘types’ of small firms. Strategic management journal, 11 (7), 535-557.

  15. Brem, A., & Wolfram, P. (2014). Research and development from the bottom up-introduction of terminologies for new product development in emerging markets. Journal of Innovation and Entrepreneurship, 3(1), 1-22.

  16. Byrnes, T., Rosseau, D., Khosla, M., Pyrkov, A., Thomasen, A., Mukai, T., & Ilo-Okeke, E. (2015). Macroscopic quantum information processing using spin coherent states. Optics Communications, 24 (337), 102-109.

  17. Chen, W., & Yuan, X. (2021). Financial inclusion in China: an overview. Frontiers of Business Research in China, 15 (1), 1-21.

  18. Chigunta, F. (2001). Understanding exclusion and creating value: A look at youth livelihoods in informal urban settlements in Zambia; study report II. Youth livelihoods and enterprise activities in Zambia.

  19. Chong, K.-M., Dolley, C., Houghton, K., & Monroe, G. S. (2009). Effect of outsourcing public sector audits on cost-efficiency. Accounting & Finance, 49 (4), 675-695.

  20. DeGobbi, M. S. (2014). Making youth entrepreneurship work in Sub-Saharan Africa: some factors of success. Open Journal of Business and Management, 2 (04), 305.

  21. Edwards, A., Carter, R. C., Senekal, M., Dodge, N., Meintjes, E., Molteno, C., ... & Jacobson, S. (2021). Fetal Alcohol Growth Restriction Is Not Attributable to Infant Feeding Practices in a Prospective Birth Cohort in Cape Town, South Africa. Current Developments in Nutrition, 5 (2), 739-739.

  22. Evans, D. S. (1987). The relationship between firm growth, size, and age: Estimates for 100 manufacturing industries. The journal of industrial economics, 567-581.

  23. Fabeil, N. F., Marzuki, K. M., Razli, I. A., Majid, M. R. A., & Pawan, M. T. A. (2019). The impact of earthquake on small business performance: evidence from small accommodation services in Ranau, Sabah. International Academic Journal of Business Management, 6 (1), 301-313.

  24. Fatoki, O., & Asah, F. (2011). The impact of firm and entrepreneurial characteristics on access to debt finance by SMEs in King Williams' town, South Africa. International Journal of Business and management, 6(8), 170.

  25. Fatoki, O., & David, G. (2010). Obstacles to the growth of new SMEs in South Africa: A principal component analysis approach. African journal of Business management, 4 (5), 729-738.

  26. Gallup (2014). Five ways to improve employee engagement now. Retrieved from http://businessjournal. gallup.com/content/166667/five-ways-improveemployee-engagement.aspx

  27. Geleta, N., & Talegeta, S. (2019). Determinants of micro and small enterprises growth in selected towns of West Shoa Zone, Oromia Regional State, Ethiopia. International Journal of Small and Medium Enterprises, 2 (2), 20-32.

  28. Gherghina, Ș. C., Botezatu, M. A., Hosszu, A., & Simionescu, L. N. (2020). Small and medium-sized enterprises (SMEs): The engine of economic growth through investments and innovation. Sustainability, 12(1), 347.

  29. Ghoul, S. E., Guedhami, O., & Kim, Y. (2017). Country-level institutions, firm value, and the role of corporate social responsibility initiatives. Journal of International Business Studies, 48 (3), 360-385.

  30. Gibb, A. (1988), Stimulating entrepreneurship and new business development. Geneva.

  31. Gibb, A. (1989). A workshop approach for stimulating new enterprise development, Working paper series. Durban, England: Durban University Business School.

  32. Gray, K. R., & Finley-Hervey, J. (2005). Women and entrepreneurship in Morocco: Debunking stereotypes and discerning strategies. The International Entrepreneurship and Management Journal, 1 (2), 203-217.

  33. Haider, S. H., Asad, M., & Fatima, M. (2017). Entrepreneurial orientation and business performance of manufacturing sector small and medium scale enterprises of Punjab Pakistan. European Business and Management, 3(2), 21-28.

  34. Handayani, S. F., & Mahendrawathi, E. R. (2019). Antecedent and business process management non-technical capabilities in social media implementation for micro, small and medium enterprises: A conceptual model. Procedia computer science,  8 (161), 1114-1121.

  35. Hill C.W.L, & Jones GR (2009). Strategic management: An integrated approach. Boston, NY: Houghton Mifflin. Hitt MA, Ireland RD, Hoskisson RE (2007). Strategic management: competitiveness and globalization.Mason, US: Thomson SouthWestern

  36. Irungu, J., & Kamau, R. (2015). Effect of Youth Enterprise Development Fund on growth of new enterprises in Kenya: A survey of selected Youth Enterprises in Mathioya District. European Journal of Business and Management, 7 (17), 55-64.

  37. Jibrilla, A. A. (2013). Impact of government interventions on small scale enterprises in Mubi north local government area, Adamawa state, Nigeria. Journal of Economics and Sustainable Development, 4 (17), 121-129.

  38. Jirabi G. F., (2017). SME Development Policies of Tanzania and Rwanda: Comparability of Policy Presentation on Focus, Significance, Challenges and Participation. https://dx.doi.org/10.4314/jdcs.v6i1.1.

  39. Karadag, H. (2015). Financial management challenges in small and medium-sized enterprises: A strategic management approach. EMAJ: Emerging Markets Journal, 5 (1), 26-40.

  40. Kemi, A. O. (2016). Impact of social network on society: A case study of abuja. American Academic Scientific Research Journal for Engineering, Technology, and Sciences, 21(1), 1-17.

  41. Khan, M. W. J., & Khalique, M. (2014). An overview of small and medium enterprises in Malaysia and Pakistan: past, present and future scenario. Business and Management Horizons, 2(2), 38-54.

  42. Kim, W. G., Lim, H., & Brymer, R. A. (2015). The effectiveness of managing social media on hotel performance. International Journal of Hospitality Management, 9 (44), 165-171.

  43. Kim, Y., & Vonortas, N. S. (2014). Managing risk in the formative years: Evidence from young enterprises in Europe. Technovation, 34 (8), 454-465.

  44. Kithae, P. P., Kimani, J. G. T., & Mburia, N. (2013). Hindrances to the growth of youth led micro and small agri-businesses in Kenya. American Journal of Research Communication, 1(12), 339-352.

  45. Kolaković, M., Turuk, M., & Turčić, I. (2019). Access to Finance–Experiences of SMEs in Croatia. Zagreb International Review of Economics & Business, 22 (1), 1-14.

  46. Malthouse, E. C., Haenlein, M., Skiera, B., Wege, E., & Zhang, M. (2013). Managing customer relationships in the social media era: Introducing the social CRM house. Journal of interactive marketing, 27 (4), 270-280.

  47. Mamo Gebretsadik, D. (2022). An Exploration of Change Leadership at Public Higher Education Institutions in Ethiopia. SAGE Open, 12(2), 215-234.

  48. Mano, Y., Iddrisu, A., Yoshino, Y., & Sonobe, T. (2012). How can micro and small enterprises in Sub-Saharan Africa become more productive? The impacts of experimental basic managerial training. World Development, 40 (3), 458-468.

  49. Mason, C., & Brown, R. (2014). Entrepreneurial ecosystems and growth oriented entrepreneurship. Final report to OECD, Paris, 30 (1), 77-102.

  50. Mathie, R. T. (2006). Specific effects of homeopathy: the challenge of explanatory research. Homeopathy, 95 (04), 197-198.

  51. Mohamed, N. A. (2017). The Influence of Entrepreneurship Training and Financial Grant on Youth-Owned Enterprises in Somalia.

  52. Morgan, G. A., Barrett, K. C., Leech, N. L., & Gloeckner, G. W. (2019). IBM SPSS for Introductory Statistics: Use and Interpretation: Use and Interpretation. Routledge.

  53. Mpakaniye, D., & Paul, J. (2017). The Role of Business Development Funds (BDF) in Creating Employment for the Youth in Rwanda. The Role of Business Development Funds (BDF) in Creating Employment for the Youth in Rwanda (October 13, 2017).

  54. Muathe, SMA., & Muraguri-Makau C.W. (2020). Entrepreneurial Spirit: Acceptance and Adoption of E-Commerce in the Health Sector in Kenya. International Journal of Business, Economics and Management Works. Vol. 7. No. 8 pp.08-14

  55. Muathe, S.M., Wawire, N.W., & Ofafa, G.A., (2013). An Empirical Study on the Relationship Between Organizational Factors and Adoption of ICT among Health Related SMEs in Nairobi, Kenya, International Journal of Arts and Commerce, Vol. 2 Issues 3. PP. 1-16

  56. Muathe, S.M.A. (2010). The Determinants of Adoption of Information and Communication Technology by Small and Medium Enterprises within the Health Sector in Nairobi, Kenya. Unpublished PhD Thesis, Kenyatta University

  57. Muchiri, D. K., Shukla, J., & Kibachia, J. (2017). Effect of choice of credit facilities on financial performance of small and medium enterprises in Rwanda. A case of SMEs registered with private sector federation of Rwanda. European Journal of Business and Social Sciences, 6 (6), 97-111.

  58. Nwankwo, O. D., Obikeze, N., & Onyali, L. C. (2011). Creativity insights for entrepreneurship of youths in eastern Nigeria: implications in organization of media learning. Journal of Emerging Trends in Educational Research and Policy Studies, 2 (5), 334-342.

  59. Nwosu, Emmanuel O., and Anthony Orji. "Access to formal credit and enterprise performance in Nigeria: A gender perspective." Argumenta Oeconomica 36, no. 1 (2016): 191-224.

  60. Okello, M. M. (2014). Economic contribution, challenges and way forward for wildlife-based tourism industry in Eastern African countries. Journal of tourism and hospitality, 3(1), 1-12.

  61. Oliveira T. & Martins F., (2011). Literature Review of information technology adoption models at firm Level. The Electronic Journal Information Systems Evaluation, 1 (14) 110- 121.

  62. Olupot, C., & Mayoka, K. G. (2013). A framework for the adoption of electronic customer relationship management information systems in uganda. The Electronic Journal of Information Systems in Developing Countries, 58(1), 1-19

  63. Ovat, O. O. (2016). Commercial banks’ credit and the growth of small and medium scale enterprises: The Nigerian experience. Journal of Economics and Finance, 7(6), 23-30.

  64. Owolabi, S. A., & Obida, S. S. (2012). Liquidity management and corporate profitability: Case study of selected manufacturing companies listed on the Nigerian stock exchange. Business Management Dynamics, 2 (2), 10-25.

  65. Pandya, V. M. (2012). Comparative analysis of development of SMEs in developed and developing countries. In The 2012 International Conference on Business and Management  6 (7), 1-20).

  66. Parveen, F., Jaafar, N. I., & Ainin, S. (2015). Social media usage and organizational performance: Reflections of Malaysian social media managers. Telematics and informatics, 32 (1), 67-78.

  67. Rahi, S. (2017). Research design and methods: A systematic review of research paradigms, sampling issues and instruments development. International Journal of Economics & Management Sciences, 6 (2), 1-5.

  68. Rajan, R. G., & Zingales, L. (2001). Financial systems, industrial structure, and growth. Oxford review of economic Policy, 17 (4), 467-482.

  69. Ramukumba, T. (2014). Overcoming SMEs challenges through critical success factors: A case of SMEs in the Western Cape Province, South Africa. Economic and business review, 16 (1), 19-38.

  70. Rapp, A., Beitelspacher, L. S., Grewal, D., & Hughes, D. E. (2013). Understanding social media effects across seller, retailer, and consumer interactions. Journal of the Academy of Marketing Science, 41 (5), 547-566.

  71. Ritchie, B. and Brindley, C., 2005. ICT adoption by SMEs: implications for relationships and management. New Technology, Work and Employment, 20 (3), 205-217

  72. Rogers, E. M. (1995). Lessons for guidelines from the diffusion of innovations. The Joint Commission journal on quality improvement, 21 (7), 324-328.

  73. Rwamigabo, E. R. (2019). Challenges and opportunities of micro or small social enterprises in Rwanda. In Handbook of Research on Value Creation for Small and Micro Social Enterprises; IGI Global, 254-270.

  74. Saa-Perez, P. D., & Garcia-Falcon, J. M. (2002). A resource-based view of human resource management and organizational capabilities development. International journal of human resource management, 13 (1), 123-140.

  75. Salfiya Ummah, M. A. C., & Haleem, A. (2021). Accessibility to industrial factors and business performance: a case study of female entrepreneurs in Sri Lanka. The Journal of Asian Finance, Economics and Business, 8(8), 127-135.

  76. Seelos, C., & Mair, J. (2007). Profitable business models and market creation in the context of deep poverty: A strategic view. Academy of management perspectives, 21 (4), 49-63.

  77. Semegn, A. A., & Bishnoi, N. K. (2021). Analysis of effect of microfinance on the performance of MSEs in Amhara National Regional State, Ethiopia. The Journal of Entrepreneurship, 30(1), 153-178.

  78. Seyoum A., Aragie, M., & Tadesse, D., (2016). Growth of micro and small enterprises in Addis Ababa City Administration: a study on selected micro and small enterprise in Bole Sub City. International Journal of Scientific and Research Publications, 6 (1), 581–592.

  79. Simpeh, E. K. (2012). An analysis of the causes and impact of rework in construction projects (Doctoral dissertation, Cape Peninsula University of Technology).

  80. Sok, P., O'Cass, A., & Sok, K. M. (2013). Achieving superior SME performance: Overarching role of marketing, innovation, and learning capabilities. Australasian Marketing Journal, 21(3), 161-167.

  81. Staw, B. M. (1991). Dressing up like an organization: When psychological theories can explain organizational action. Journal of management, 17 (4), 805-819.

  82. Tekele, A. A. (2019). Factors affecting the performance of micro and small enterprises in Wolita Sodo Town. International Journal of Research in Business Studies and Management, 6 (12), 18-26.

  83. Thompson, J. L., (2004). The Facets of the entrepreneur: Identifying Entrepreneurial Potential. Management decision, 42 (2), 243 -258.

  84. Tundui, C. S., & Tundui, H. (2013). Microcredit, micro enterprising and repayment Myth: the case of micro and small women business entrepreneurs in Tanzania. American Journal of Business and Management, 2(1), 20-30.

  85. Tuten, T., & Marks, M. (2012). The adoption of social media as educational technology among marketing educators. Marketing Education Review, 22 (3), 201-214.

  86. UNCTAD. (2016). World investment report 2016. Investor nationality: Policy challenges. Geneva: United Nations Publications. Retrieved from http://unctad.org/en/Publications Library/wir2016_en.pdf

  87. Uwitonze, M. (2016). Small and medium enterprises and job creation in Rwanda (Doctoral dissertation, University of Rwanda).

  88. Vij, D., & James, D. L. (2014). A study on changing trends in social media and its impact globally. International Journal of Entrepreneurship & Business Environment Perspectives, 3 (1), 848-853.

  89. Wang, Z., & Kim, H. G. (2017). Can social media marketing improve customer relationship capabilities and firm performance? Dynamic capability perspective. Journal of Interactive marketing, 39 (1), 15-26.

  90. Wellalage, N. H., & Locke, S. (2016). Informality and credit constraints: evidence from Sub-Saharan African MSEs. Applied Economics, 48(29), 2756-2770.

  91. Winer, R. S. (2009). New communications approaches in marketing: Issues and research directions. Journal of interactive marketing, 23(2), 108-117.

  92. World Bank Group. (2014). Doing business 2015: Going beyond efficiency: comparing business regulations for domestic firms in 189 economies: A World Bank Group Flagship Report. World Bank Publications.

  93. Xiang, Z., & Gretzel, U. (2010). Role of social media in online travel information search. Tourism management, 31 (2), 179-188.

bottom of page