KENYA.
RESEARCH PROJECT: THE ROLE OF SMALL-SCALE ENTERPRISES IN ALLEVIATING UNEMPLOYMENT AMONG THE YOUTHS IN ELDORET TOWN, KENYA.
Research project submitted to the school of Business and Economics as a requirement in partial fulfilment for the award of a degree in Bachelor of Science in Entrepreneurship studies
AUGUST 2018
This research project is my authentic work and has not been presented previously or concurrently to either Moi University or any other institutions for academic purposes.
Signature………………………..… Date:…………………………………
Name: PERIS KRUKU
REG: ENT/18/14
APPROVAL
This research proposal has been submitted with my approval as the supervisor.
SUPERVISOR
Signature………………………………… Date…………………………………….
Name: Madam Mercy
I would like to thank most sincerely my parents, my siblings and my friends without whose love, efforts and encouragement. I could not have gone this far in my studies.
Secondly, I must express my appreciation to all those people without whose help, sympathetic interest and criticism, it would have not been possible to complete this project.
I am indebted to persons and institution who aided me in the execution of this piece of work. I am especially grateful to my lecturers in school of business for their guidance and moral support.
My deep appreciation goes to my supervisor Madam Mercy for directing this project. Her untiring supervision and guidance kept me on my feet right from the beginning of the study till the end.
Above all, I wish to acknowledge and give thanks to the Lord for his love, and protection throughout my life.
To all of you, I say thank you very much and God bless you.
This proposal is dedicated to my parents and siblings for their love and support throughout my academics.
The project title is, the role of small-scale enterprises in alleviating unemployment among the youths. Small businesses are the essential constituents in the development of economy and generating employment opportunities within country. Unemployment is the major concern, which is spreading its roots in various forms and dimensions. The objective of the study was to examine the role of small businesses in alleviating the acuity of unemployment in Eldoret town.
Literature review looks at various studies that have been carried out by various scholars on unemployment were used. It shows the causes and effects of unemployment on people and the society. Different models have been used to explain the concept of unemployment.
Methods of data collection used were; observation, primary and secondary methods. The sampling method used were; purposive sampling and accidental sampling. The Data was collected using one type of questionnaire that had both close ended and open-ended questions.
The study’s main hypotheses were comprised of two assumptions that were formulated to guide the research. Both hypotheses in chapter four were tested and found they supported the data collected in the field.
The last chapter gives conclusion in form of summary concerning research findings. It also gives recommendations in form of measures that should be taken to minimize the causes and effects of unemployment.
CHAPTER ONE
Unemployment has emerged as the single most pressing problem facing most countries today. The reasons unemployment matters are that it generally reduces output and aggregate income; it increases inequality, and since the unemployed are more than the employed, it erodes human capital; and finally it involves psychic costs since people need to be needed (Borooah, 1996). In addition, unemployment increases the dependency ratio and worsens the poverty situation of the country.
The fact and extent of unemployment in all parts of the world – the developed and less developed countries – has been documented in various works, but the gravity of the problem varies between countries. According to a United Nations (1993) report, the number of unemployed people in the sub-Saharan Africa was estimated at 9 million during 1980 and was expected to rise to 28 million in the 1990s. On the other hand, Borooah (1996) notes that in 1992, 16 million people, one in every ten (1/10) of the European Union’s labour force was unemployed.
The above figures strengthen the idea that unemployment is not a problem confined to Africa and other third world countries alone, but that it is also a problem that affects the developed countries too.
Youth unemployment in Kenya is a ticking time bomb waiting to explode. Today unemployment in Kenya stands at 40%, and 70% of those unemployed are aged between 15 and 35. The WORLD BANK estimates that approximately 800,000 Kenyans join the labour market each year and only 50,000 succeed in getting professional jobs. This has led to the high level of unemployment leading to the escalating incidents of crime and insecurity in the country.
In order to revise this trend, the Kenyan government should see its growing youth population as an opportunity and not a liability. Forbes Africa recently released a list of Africa’s 30 best entrepreneurs under 30 years where 7 out of the 30 entrepreneurs are Kenyan. This shows the high level of talent and creativity that the Kenyan youth possess.
The government has failed to promote and encourage this level of innovative thinking. For Kenya to remain competitive, a curriculum that caters to the demand of its burgeoning labor market must be developed. The government should also partner with the private sector to provide Kenyan youths with skills in information and communication technologies.
The main aim of the study was to examine the extent of unemployment among the youths in Eldoret town. The study assessed the role of small-scale enterprises in alleviating unemployment and their contribution in the development of economy.
Over the last decade, the issue of unemployment has become a worldwide phenomenon. Neither developing nor the most industrialized countries in the world can claim full employment. Public and private sectors have seen huge job cuts particularly since the early 1980s. Even the largest Japanese companies have to drop the famous lifetime guarantee of employment for their staff, as the development of job loss was pinpointed by Statt (1994).
Unemployment affects all groups of people but is more rampant among the youths. Many young graduates leave secondary schools and other training institutions every year and only few jobs are created for them. In this group are included a very large proportion of new entrants into the labour market, and they frequently have a period of unemployment associated with “shopping around” for a job. They frequently hold part time jobs which are sporadic and occasional. Young people tend to lose chance for their jobs more frequently than old persons as they seek the “right” job. Moreover, young people starting out on their working careers tend to be relatively vulnerable to layoffs because of lack of seniority and inexperience. Educated unemployment has assumed a serious proportion. Our institutions oflearning have continued to churn out graduates who cannot be absorbed in the job market.
The number of small-scale enterprises is generally positive indicator of human constructed capital, and may also contribute to social capital. Small businesses keep money and business in the local economy, they bring diversity and pride to a community and can create business with goods and services to meet the specific needs of the community. When business owners and consumers feel proud to buy and sell locally, individuals and communities feel empowered to be self-reliant.
Small-scale enterprises play a huge role in the livelihoods of women and men living in poverty in developing countries. Many people who lack land in the rural areas or adequate employment in agriculture engage in small-scale business. Urban residents who don’t have formal employment depend at least on part of the income from small scale home based manufacturing and processing activities.
The problem of youth unemployment is not going to disappear on its own accord through demographic chance in the near future. The consequences of youth unemployment are a cause for concern. Furthermore, a case may be made for concentrating attention on young people with those specific groups of young people in the labour market who face difficulties in obtaining employment. Thus, particular attention should be paid to fresh graduates leaving schools and training institutions. The study will find out the extent of unemployment among the youth. How many youths are unemployed? Is the number high or low? Is the number increasing or decreasing? At what rate is the number increasing or decreasing
In September 2002, under the co-chair of President Bill Clinton of America and first lady of Egypt Mrs. Suzanne Mubarak, 1600 delegates (1000 youths) from 120 countries launched the YES Campaign response to the enormous global challenge of youth unemployment. In 2006, Kenya launched the YES campaign and this showed great concern for the rising problem of unemployment among the youths. The most obvious general labour market characteristic of youth unemployment is that its rate is higher than that of adults. The observation is true in both developed and developing countries.
Unemployment has both economic and social implications that are universally recognized as harmful to both societies and individuals who are not working. Material hardships, physiological damage due to unemployment is all likely to increase rapidly with duration (Fagin and Little, 1984, Smith 1987).
A development process that fails to produce sufficient employment opportunities is therefore not one that is acceptable. Development must meet the objectives of income distribution, regional balance, rate of growth of domestic product. It seems clear that to attack the unemployment problem only by seeking a markedly higher rate of growth of output than that achieved over the 1960’s is not satisfactory. Thus, we must seek development that is, in some sense, built around a more effective use of domestic resources and that will result in growth and development. The government must design some measures to provide jobs and income to the mass population.
Jobs need to be created for people joining the labour force and reduce unemployment. Job creation can be the basis for more investment, greater labour productivity and rapid economic development. This will generate revenue for social investments like health, education and social security to meet needs of both old and young, and secure a basis for future development.
1. To determine the extent of unemployment among the youths in Eldoret town.
2. To determine how small – scale enterprises can help reduce unemployment among the youths in Eldoret town.
3. To establish possible ways of alleviating unemployment among the youths
1. How many youths are employed in Eldoret town?
2. How do small- scale enterprises reduce unemployment among the youths in Eldoret town?
3. How can we reduce youth unemployment in the country?
It was not possible to conduct research in the entire population. In the research, the researcher identified a sample to work with assuming that their views would be representative of the whole population. The research targeted the youth population aged 18-35 years. It was conducted in Eldoret town.
Over the last few decades the issue of unemployment has become a worldwide phenomenon. Neither developing nor the most industrialized countries in the world can claim full employment. Public and private sectors have seen huge jobs cuts particularly since the early 1980’s. “Even the largest Japanese companies are having to drop the famous lifetime guarantee of employment for their staff’ as the development of job was pinpointed by scat (1994).
The importance of work is taken for granted throughout our lives. Already small children are socialized into a certain value system of the world of work. This socialized is reflected, for example, in questions routinely asked of children, such as ‘what are you going to be when you grow up?’ According to Statt (1994), what this question really means is ‘What job are you going to do for a living?’ Likewise, as an adult the question ‘What are you doing?” is one we are usually faced with when someone meets us for the first time. Answering this question offers instant clues to income, social status and lifestyle and gives some idea of how a person expects to be treated.
We have become so used to this notion that we allow it to dictate our everyday life without questioning it “The desire to have a job and to meet all the costs of living from the income received for this work has become the accepted pattern for most people” (Offe, Heinze 1992).
Moreover, work serves many social and interpersonal functions and offers opportunities for people to satisfy their psychological needs. Work can provide social contacts, friendship and support (through colleagues) as well as opportunities for gaining recognition and developing competencies. Work can help young people enter the adult world (Sarason, Sarason, 1985; Winefield, 1997). Remuneration for work done helps individuals provide for themselves and their families? A job can engender a sense of purpose and value and shape a person’s identity and level of self-esteem (Argyle, 1990). Hence, the loss of work means the loss of such opportunities. Consequently, most unemployed people wish to return to work and to contribute to their own and their loved ones’ livelihood. Overtime,being jobless comes to be equated with being worthless (fCates et al., 1994). Also societies regard work as one of the most important aspects of human beings, with effect that those unable to work or without work are made to fees ostracized through a low social status (Forrester, 1999). In addition, a social stigma is attached to being unemployed, those with hostile attitudes towards the unemployed usually assume that unemployed people could get work if they really want it. In other words, it is assumed that unemployed people choose to be unemployed. As Kelvin and Jarret (1985) stated. “In effect, the unemployed individual always seems to be somehow suspect at best he is seen as probably in part to become for his unemployment; and even if he is ‘genuine’ it is thought that he should be kept short, so that he keeps looking for work- otherwise there is the suspicion that he might just sit back and do nothing” (In Winefield, Tiggermann, Winefield & Goldney 1993).
Development theory is inevitably built upon a specific institutional structure. The well-known labour models depend upon an institutionally determined agricultural wage rate and a given institutional structure, such as a landlord-tenant system, to extract the agricultural surplus. Moreover, most of these models operate on the assumption of a closed economy. These types of assumptions have led to (Myints, 1965) criticism of the over emphasis of development economies on the “India-type” model. Such models are not directly relevant to other countries with different population densities and institutional environments. Most authors have proposed a “land surplus” assumption as more appropriate although little effort has been made to analyse the process of labour allocation and development in a dual economy under a land surplus assumption.
A further institutional factor which must be considered in an analysis of rural employment in African development is the agrarian system of small-holder communal ownership of land. As a result, there is no landlord-tenant system, a relatively small class of landless labourers and generally no land market. Such a system has quite different implications for factor mobility and factor markets than a landlord-tenant system.
These general differences in resources endowment, the export orientation, and the agrarian system of African economies, caution against the direct application of popular development theories to the African situation. But this does not preclude modification of these models to fit the African institutional setting, just as we hope the framework we present below for analysis of employment problems has relevance to other regions. This is because African countries share the fundamental ingredients of the employment problem of the developing world-high rates of population growth rates coupled with a dual economic structure.
The aggregate growth models of the Harrod-Domar which are generally used in the planning process focus on growth of output through capital accumulation and are not useful in analysingsectorial patterns of employment and income distribution. The early dual economy models of the Fei-Ranis type did consider labour, but suffered from assumptions of surplus labour and institutional wages in agricultural and limited interaction in the product and factor market. Recently, however several attempts have been made to modify the dun I economy models to analyse the employment problem. These include, among others, the models of Harris and Todaro [1970] and Mellor & Lele (1971) and Oshima (1971).
The Harris & Todaro (1970) two sector model arose out of the author’s attempts to analyse the urban unemployment problem in Kenya. Using the Todaro model of rural-urban migration in a comparative static framework they analyse the implications of various policies on urban unemployment.
Rural-urban interactions in the labour market are explicitly modelled as well as rudimentary product market. The assumptions about wage rate determination are particularly interesting. They assume an institutionally determined wage rate m urban areas and a wage determined by labour supply and demand in rural areas. This is a direct reversal of the assumptions of the Fei-Ranis model. Using these assumption are not likely to reduce urban unemployment because of the nature of migration from rural areas. A logical implication then is that employment must be created in rural areas through rural development to reduce urban unemployment. But Byer Lee (1971) shows that within the closed economy model of Harris and Todaro, an increase in agricultural output is likely to decrease the rate of unemployment.
Models of employment and development (Derek Byerlee, 1972) 14 crease migration (and urban unemployment) since the agricultural terms of trade fall while the wage rate in urban areas is fixed. This demonstrates the dangers of using a closed economy assumption.
These models attempt to analyse the behaviour of employment at the aggregate level through the interactions of sectors in the product and factor market. However, because of the complexity of such interactions, each model is only able to focus on a few key interactions between two sectors. (Reynolds, 1969) in recognizing this problem suggests that any departure from a two sector mode to include additional sectors and sectorial interactions would mean forgoing analytical solution techniques. He proposes numerical simulations as an alternative but recognizes that this would require greatly improved empirical information from a number of countries in order to conduct realistic experiments on the economic system.
In order to analyse the role played by small-scale enterprises in alleviating unemployment we first provide a framework in which to delineate the important theoretical issues and relevant empirical evidence. Increasingly, however the employment problem is being examined within the context of several widespread, but related problems in the developing world such as open and partial unemployment particularly in urban areas are very common. Being the larges town in Uasin Gishu county, Eldoret town has a huge number of youths most of them are unemployed.. Majority of the youths in the town look for alternative ways of earning livelihood in the economy for instance operating small scale enterprises
Independent variables
| To establish the extent of unemployment among the youths. |
Alleviating unemployment among the youths |
| To examine how small scale enterprises have reduced unemployment among the youths. |
| To establish possible ways of alleviating unemployment. |
The rate of unemployment among the youths is very high. Such high unemployment is not just a problem for the development of the country that is also very relevant for the young people’s personal development. Developmental psychologists recognize the transition from school to work as a significant phase in the maturation of young people (Kaplan, 1998). This transition represents their entrance into the adult world, for the vast majority, getting their first job means that they are no longer completely dependent on their parents financially. They are requested to perform on the job and to fulfil certain responsibilities such as being punctual, industrious, competent, socially agreeable and accountable (Winefield et al., 1993; Hess, Peterson and Mortimer, 1994; Kaplan, 1998). Theexperience of being employed provides opportunities for personalityand identityformation (Hess et al.; 1994)
Several studies have been conducted to thematise the specific problems of unemployment among young people (Winefield & Tiggermann, 1991). They have revealed that school leavers who enter the job market immediately, experience an improvement in their psychological well-being while those who become unemployed experience a significant deterioration in it (Feather and O’Brien, 1986; Statt, 1994). This indicates the psychological importance of employment for young people. (Winefield et al 1993) for instance, conducted a longitudinal study on youth unemployment and its psychological impact investigating 3000 south Australian school leaves throughout the decade 1980 to 1989. The study brought evidence that unemployment among youth led to lower self-esteem and increased emotional depression, particularly in the case of long term unemployment. It was reported that youth who were still unemployed seven months after leaving school were less satisfied with themselves and felt more depressed, unhappy, and lonely than those who found work (Winefield, 1997).
As pointed out by Johoda (1982), unemployment means the loss of a pre-given time structure. As a consequence of unemployment the individual has a lot of free time at his or her dispersal which one has learnt to organize constructively. Ironically, a large amount of ‘free time’ can become a major stress for the unemployed (although it may appear to be a luxury for those who are employed and wish to have more time available to themselves.
The issue of time already become apparent when Johoda et al. (1971) described how the time structure of unemployed slowly disappeared and how they stopped planning their time “Now that they are no longer under pressure, they undertake nothing new and drift gradually out of an ordered existence into one that is undisciplined and empty” (Johada et al 1971). This is however, referred mainly to the men in the Marienthal study. Unemployed women still maintained a time structure, keeping themselves busy with household duties. “For the men, the division of the days into hours has long since lost all meaning. Getting up, the midday, near going to bed, are the only remaining points of reference. In between, time elapses without anyone really knowing what has taken place” (Johada et al 1971). The less that happened in Marienthal, the more the impression of an abundance of time occurred throughout the town. People’s difficulties with too much free time could also be linked to an industrialized way of life. From early childhood, people become used to externally determined time structures (be it in kindergarten, school or the work place). When a person is suddenly confronted with the loss of structural time he or she might find it difficult to occupy him or herself with self-determined activities (Plattner, 1993). If someone has nothing to do, time becomes meaningless, as do goals and plans. A vicious cycle may ensure the more a person becomes caught up in the monotonous manner in which time passes, the more time seems to ‘melt away’ and future orientation diminishes.
Studies have also revealed that unemployed youths show significantly higher rates of anxiety, anger, helplessness, guilt, shame than those of older age (Hess et al, 1994) Because of lack of financial resources, unemployed youth are often excluded from leisure activities undertaken by their working peers. Hence, not only are young unemployed people alienated from the structured world of work but they are also alienated from social activities they have been accustomed to (Hess e al; 1994). (Winefield et al. 1993) in their longitudinal study on school leavers found that the unemployed school leavers spent their spare time less productively than those employed, it was found that for the unemployed, time spend doing nothing was most often correlated with negative psychological well-being. Other psychological effects of unemployment increased anxiety lack of self- confidence, pessimism, fatalism, hopelessness alcoholism apathy, suicide , as well as stress psychosomatic disorders such as headaches , stomach dermatitis bronchitis and heart diseases (creed, Hicks & Machin 1998; Statt, 1994 Argyle, 1990). Psychologists have devoted a great deal of attention to the emotional changes that usually occur within an. individual following job loss (Winefieid et al; 1993) Consequently numerous studies have been conducted concerning the psychological effects of unemployment. However, as mentioned before, psychological unemployment research on the African continent is rarely found.
Studies have shown that one of the greatest source of personal and family problems is the shortage of money. In various developed countries there are formal support systems for unemployed people (such as unemployment benefits or social welfare benefits). From an African perspective, where such support system are usually not available, unemployment or social welfare benefits would be a great relief for the people concerned. In as much as support systems reduce the financial constraints, they do net, however, necessary reduce the psychological stress experience.
Unemployment benefits only last for a certain period of time, long term unemployed people or those who do not quality for unemployment benefits (for instance, because they have not worked long enough to have paid sufficient contribution into an unemployment benefit fund) may become recipients of social welfare (at least in some countries). Lang (1995) “While both unemployment and welfare benefits help relieve economic deprivation during unemployment, only unemployment subsidies have the psychological benefit of protecting against depression, regardless of household income, socioeconomic, and length of unemployment. Even when unemployment or welfare benefits are available, they are usually of a lower amount than the previous income. Ullah (1990) emphasized that the role played by financial hardship has not yet received enough attention. It an Australian study, he found that high financial strain caused lower levels of structured activity which contribute to poor mental health. Rowley and feather (1987) reported a significant correlation between financial strain and time structure among their samples of unemployed Australian men. Those men with the greatest amount of financial strain also reported less time structure in their normal day to day activities. There is also evidence that unemployed people experiencing the most economic hardship make the greatest effort to find a job (Ullah, 1990). When unsuccessful however, these efforts may lead to higher depression scores and ill-health.
Prominent unemployment theorists have different opinions about the role attributed to financial variables in causing poor mental health. According to Johada (1982), for example, the loss of latent functions of employment rather than the loss of payment causes psychological disintegration, in contrast, Fryer (1986) emphasized the psychological burdens of material poverty and hardship. Warr (1987) stated that unavailability of money affects the opportunity for personal control and physical security.
For many unemployed people in African countries, unemployment means poverty (cf. Pendleton and Frayne 1998) because the unemployed do not receive unemployment or social welfare benefits. Poverty not only denies a person the most basic needs such as food, clothing and shelters, but also binds the person into inactivity (statt, 1994). IF one has no money then they cannot participate in social activities, it is difficult, if not impossible respect to them, as Forrester (1999) emphasized. Poor people are regarded as Undesirable and are” put aside” (Ibid). What makes this even worse is that poor people are laced with prejudices against them that go so far that they are blamed for living in such areas (Ibid). Poverty not only leads to disrespect and social exclusion, it also affect the psychological state of minds of individuals, it creates the experience of personal insecurity and “reduces ones’ sense of personal control” (Statt, 1994) For example, future orientation is regarded as an expression of psychological well-being. However, to plan for the future is a luxury for those whose present life is ensured through work and regular income. Those who live in poverty cannot afford to plan too far into the future. They are more concerned with their survival on a day to day basis (Plattner, 1990).
The psychological effects of unemployment on an individual’s general well-being have been known to also affect job-seeking behaviour (Headley, 1997; Feather 1992; Landy, 1989) low self-esteem, self5become and lack of confidence as a result of unemployment can negatively affect the outcome of job seeking behaviour. For example, in a job interview the candidate may not assert him or herself in a positive manner that could reveal his or her potential. Dodey (1992) through a longitudinal study with Dutch technical college graduates, found that “less psychologically distressed graduates were more likely to become employed than more distressed graduates”.
Unemployed people could get stuck in a vicious cycle i.e. the longer they stay unemployed the lower their self-esteem may become and therefore the less likely they to perform well job interviews, and so on. Ullafc (1990) found that those unemployed who are most actively engaged in job-seeking tend to experience higher levels of depression and general psychological distress. This can lead to another vicious cycle the more distressed the unemployed person is, the more he or she is likely to be unsuccessful in finding a job and therefore the more depressed and distressed he or she becomes, and so on.
Many intervention and training programs have been developed to assist unemployed people by giving them skills for job seeking (Amundson, 1996; Davies, 1996; Proudfoot and Guest, 1996). Such programs focus on the improvement of self confidence in job seeking. The idea behind such programmers is that unemployed people meet others in the same situation, and that through their interaction they learn to “move away from the paralyzing effect of self-blame into mobilizing their energies toward creating changes in their lives” (Davies , 1996).
Social support in crucial issue in coping with unemployment, which has been investigated particularly since the 19880s (Sarason and Sarason, 1985). Research has shown that “… informal support systems, such as friends and relatives, can buffer against the negative effects of unemployment” (Lang, 1995:1) An approach often mentioned in literature is that of Cobb (1976) who emphasized the cognitive aspect of social support. He defined social support as the information conveyed to a person that he or she, 1) is being cared for and loved 2) receives acknowledgement and esteem, and 3) is part of a network of communication and mutual duties.
Social resources reduced negative consequences of stressful events and maintain Psychological as well as physical well-being (Sarason and Sarason, 1985). Social support by relatives and friends could be provided, for instance, in the form of money, food and shelter or assistance in finding a job (instrumental support) or in the form of encouragement (emotional support).
However, research has also shown that with regard to the social networks, the unemployed can face a number of problems. For instance, several studies have found that “unemployed youth are likely to experience decreased family social support and increased family conflict and tensions” (Hess et al; 1994).
Unemployed men often perceive their situation as a loss of social status which might lead them to avoiding contact with friends (because of shame). Thus the potential for social support is reduced, in addition, men’s position of power within marriage and family as a whole is consequently affected (Statt, 1994) it was found that wives of unemployed husbands report high levels of depression and that unemployment increases marital conflict (Jones, 1992) Behavioural problems were also found among children of unemployed household members (Jone and Rosenberg, 1993).
In conclusion, without a job people are rootless, they become confused as to who they are and where they belong. They become disenfranchised citizens, poor disoriented in time and generally psychologically disturbed.
This chapter presents the research techniques that was adopted with the aim of answering the research questions. These includes the research design, population, sampling design, sampling method, sample size, data collection methods, research procedures and data analysis methods.
Eldoret town is the fifth largest town in Kenya after Nairobi, Mombasa, Kisumu and Nakuru. The town is located in Rift Valley province, Uasin Gishu County. It is the capital and largest city in Uasin Gishu County. The population was 289,380 in the 2009 census and it is currently the fastest growing town in Kenya. It is also the second largest urban centre in Midwestern Kenya after Nakuru.
Eldoret town was considered to be the most suitable for data collection because it is one of the largest towns in Kenya and the capital of Uasin Gishu County with majority of youths being unemployed. This is because many young people migrate from rural areas to urban areas in search of employment. Due to high rates of migration the government and private sectors in urban centres cannot absorb all the migrants in job sector. This leads to unemployment and the migrants look for alternative ways of survival with small scale enterprising being one of them. We also find that within Eldoret town, there is growing number of organizations which have come up to support and promote small-scale enterprising being one of them. We also find that within the town there is growing number of organizations which have come up to support and promote small-scale enterprises. The Jubilee government is also supporting small-scale enterprises through constituency development funds (CDF).
The researcher adopted the descriptive research design. The particular research design objective is to describe phenomenon by measuring the relationship between variables. Descriptive research seeks to describe the phenomenon as it occurs (Creswell, 2003). The study aimed at examining how small enterprises help in alleviating youth unemployment in Eldoret town.
In the descriptive research design, there were two approaches that a researcher may choose. They are the cross-sectional research design and the longitudinal research design (Cooper and Schindler, 2003). The study will adopt a cross-sectional survey design which collects information at a certain point in time.
Sampling is defined by Chandran (2004), as a method used in drawing samples from a population usually in such a manner that the sample facilitated determination of some hypothesis concerning the population. The study adopted the stratified sampling technique, which involves subdivision of a population into smaller groups, which are referred to as strata (Mugenda & Mugenda, 2003)
The research targeted small enterprises owned by youth’s in Eldoret town. Many people engage in informal sector activities which are often characterized by easy entry, lack of official documentation of records and low capital investment, among others. 120 entrepreneurs from Eldoret town were selected at random and interviewed. The response from the respondents was analysed and used to make generalization on the role played by small-scale enterprises in alleviating unemployment
The study adopted the stratified sampling technique, which involves subdivision of a population into smaller groups, which are referred to as strata (Mugenda & Mugenda, 2003).The strata were based on the selected small enterprises in Eldoret town.
The stratified sampling method was employed to classify the entire population into strata based in Eldoret. According to Haque (2008), stratified sampling was used by dividing the population into different homogeneous group or strata which were based on the age of business owners.
According to Mugenda and Mugenda (2003) recommends for a sample size of 30 % of the target population. To determine the sample size to be used for the study, the researcher adopted the Cochran (1977) sampling formula.
The study adopted the questionnaire as the data collection instrument to gather primary data from the field. The preference for the questionnaire is that it can be administered to a large population. It is also advantageous as it is relatively quicker and simple to give to a large population and also time and cost efficient for academic research. The questionnaire was developed according to the research questions. The researcher used the self-administration of questionnaires. The advantage of using self-administered approach is to motivate respondents to participate in research as they are afforded the privacy to answer questions to their capacity without the researchers’ influence. This approach also assisted the researcher to collect complete questionnaires as they go through each item with the respondents helping them where they may not be able to understand the questions. The questionnaire include both open-ended and close-ended questions. The open-ended questions were used to give respondents an opportunity to respond in their words and close-ended questions in order to limit their responses to predetermined responses.
The researcher developed a cover letter which was provided to research subjects during the data collection process. To establish the reliability and validity of the research instrument, the researcher performed a pilot test. The researcher then prepared a data collection schedule which was used to direct the process of data collection. The researcher administered the questionnaire to unemployed youths and small business owners in Eldoret town.
Data analysis process began with the coding of the questionnaire responses. The researcher adopted the descriptive statistics to analyze the data. The data was analyzed using descriptive statistics. Presentation of the collected data was done through tables and various graphical presentations to make it easy for understanding.
Presented in this chapter are the findings of the data analyzed together with their interpretations. The data presented in this chapter were processed using the statistical package for social sciences programme (SPSS). Demographic and other general information about respondents who participated.
The respondents were asked to give information relating to, among other things, their gender, age and highest academic qualification. The information is presented as below.
Table 4.2.0: Gender of respondents
| Gender | Frequency | Percentage |
| Male | 63 | 52.5 |
| Female | 57 | 47.5 |
| Total | 120 | 100 |
Figure 4.2.0 Gender of respondents
Majority of respondents were male (52.5%) with female being only (47.5%)
Table 4.2.1: Respondents composition by age
| Age category | Frequency | Percentage |
| 15-24 | 38 | 31.25 |
| 25-34 | 27 | 22.5 |
| 35-44 | 24 | 20 |
| 45-54 | 19 | 16.25 |
| Above 55 | 12 | 10 |
| Total | 120 | 100 |
Figure 4.2.1: Respondents composition by age
Majority of youths in Eldoret town were aged between 15-24 years (31.25%). This age group is followed by those between ages 25-34 years (22.5%). Age composition among the youths decreases with the increasing old age.
Table 4.2.2: Marital status
| Marital status | Frequency | Percentage |
| Single | 67 | 56.25 |
| Married | 53 | 43.75 |
| Total | 120 | 100 |
Figure 4.2.2: Marital status.
There were more married (56.25%) youths than the single ones (43.75%) according to the research
Table 4.2.3: Number of children of respondents
| Number of children | Frequency | Percentage |
| None | 51 | 42.9 |
| 1 to 4 | 43 | 35.7 |
| 4 to 8 | 17 | 14.3 |
| Above 8 | 9 | 7.1 |
| Total | 120 | 100 |
Figure 4.2.3: The number of children of respondents
Although a relatively high number of respondents were married, majority did not have children in their marriages. A whole 42.9% have no children according to this report. 35.7 had four children and below. Only a small 7.1% have more than eight children.
Table 4.2.5: How long have you lived in Eldoret town
| Time (yrs) | Frequency | Percentage |
| 1>5 | 53 | 43.75 |
| 5>10 | 37 | 31.25 |
| 10>15 | 18 | 15 |
| 20 and above | 12 | 10 |
| Total | 120 | 100 |
Figure 4.2.4: How long have you lived in the town
We can see from the table 4.2.5 above that most of the youths (43.75%) have not been in the town for a very long time. This could be due to the upsurge of people from rural areas in the search for employment.
| Education level | Frequency | Percentage |
| Never | 8 | 6.25 |
| Primary | 37 | 31.25 |
| Secondary | 45 | 37.5 |
| College | 19 | 16.25 |
| University | 11 | 8.75 |
| Total | 120 | 100 |
4.3.1: Level of education
Unemployment levels are more prevalent among secondary school leavers by 37.5% followed by primary school leavers where unemployment stands at 31.25%. University graduates are the least unemployed at about 8.75%.
Table 4.3.2: Any extra training after school
| Response | Frequency | Percentage |
| Yes | 53 | 43.75 |
| No | 67 | 56.25 |
| Total | 120 | 100 |
Figure 4.3.2: Any extra training after school
A majority (56.25%) of the school leavers did not receive extra training after school. This could explain the unemployment prevalence among the youth.
Table 4.3.3 Type of training
| Type of training | Frequency | Percentage |
| Polytechnic | 17 | 14.3 |
| Apprenticeship | 41 | 34.3 |
| Technical training | 28 | 22.9 |
| On job training | 34 | 28.6 |
| Total | 120 | 100 |
Figure 4.3.3: Type of training
More people (34.3%) enter into apprenticeship after school as a form of after school training.
Table 4.3.4: Types of employment among the youths
| Types of employment | Frequency | Percentage |
| Formal employment | 30 | 25 |
| Self -employment | 90 | 75 |
| Total | 120 | 100 |
Figure 4.3.4: Types of employment among the youth
A very large number of youths in Eldoret town rely on self-employment as a means of livelihood. This is represented by 75% of the total sample size.
Table 4.3.5: Type of enterprise among the youth
| Types of enterprise | Frequency | Percentage |
| Small scale | 90 | 75 |
| Large scale | 30 | 25 |
| Total | 120 | 100 |
4.3.5 Types of enterprise among the youths
Of those youths in self-employment, a majority (75%) hold small scale businesses. Only a few (25%) are in large scale business.
Table 4.3.6: What were you doing before you joined the enterprise?
| Former economic activity | Frequency | Percentage |
| Employed | 26 | 21.7 |
| Just completed school | 60 | 50.0 |
| Stayed at home | 34 | 28.3 |
| Total | 120 | 100 |
Figure 4.3.6: What were you doing before you joined this enterprise?
Here the respondents were asked to clearly state the reasons that led them to start business ventures as a means to their livelihoods. The responses were as shown in the diagram below.
Table 4.3.7: Reasons for starting the business
| Reason | Frequency | Percentage |
| Unemployment | 28 | 23.2 |
| Self -reliance | 64 | 53.6 |
| Self-independence | 28 | 23.2 |
| Total | 120 | 100 |
Figure 4.3.7: Reasons for starting the business
Most of the youths (53.6%) in business made the choice in order to be self-reliant. Unemployment and self-independence were both 23.2%.
Table 4.3.8: Business premise
| Premise | Frequency | Percent |
| Permanent | 16 | 13.3 |
| None | 32 | 26.7 |
| Semi-permanent | 44 | 36.7 |
| Temporary | 28 | 23.3 |
| Total | 120 | 100 |
Figure 4.3.8: Business premise
36.7% have semi-permanent business structures. This is followed by 26.7% who own no business premise. 23.3% have temporary structures while only 13.3% have permanent business premises.
Table 4.3.9: products/services of the business
| Types of goods | Frequency | Percentage |
| Domestic | 80 | 66.7 |
| Commercial | 40 | 33.3 |
| Total | 120 | 100 |
Figure 4.3.9 Products/services of the business
Domestic products composed 66.7% while commercial products constituted of 33.3%.
Table 4.3.10: Major income source
| Income source | Frequency | Percentage |
| Formal employment | 40 | 33.7 |
| Self-employment | 80 | 66.7 |
| Total | 120 | 100 |
Figure 4.3.10: The major source of income for respondents
Self-employment is a major source of income for youths 66.7%. Formal employment contributes 33.3%.
Table 4.3.11: level of income contribution by the business
| Level of contribution | Frequency | Percentage |
| A lot | 80 | 66.7 |
| Little | 30 | 25.0 |
| Not at all | 10 | 8.3 |
| Total | 120 | 100 |
Figure 4.3.11: Level of income contribution by the business
66.7% of the respondents consented that their business contributed a lot as income source.
Table 4.3.12: source of business finance
| Business income source | frequency | Percentage |
| Loan | 70 | 58.3 |
| Little | 20 | 16.7 |
| Family assets | 30 | 25 |
| Total | 120 | 100 |
Figure 4.3.12: source of business finance
Loans form major source of income (58.3) to these business run by the youth
Table 4.3.13: External sources of finance
| Responses | Frequency | Percentage |
| Yes | 70 | 58.3 |
| No | 50 | 41.7 |
| Total | 120 | 100 |
Figure 4.3.13: External sources of income
Those who received financial aid for their businesses are (58.3%) while (41.7%) did not.
Table 4.3.14: The external sources of finance
| External sources | Frequency | Percentage |
| Government | 30 | 25.0 |
| NGOs | 40 | 33.3 |
| Micro-finance | 50 | 41.7 |
| Total | 120 | 100 |
Table 4.3.15: The future of business
| Business future | Frequency | Percentage |
| Promising | 50 | 41.7 |
| Gloomy | 30 | 25.0 |
| No change | 40 | 33.3 |
| Total | 120 | 100 |
Figure 4.3.15: The future of business
A significant number of respondents (41.7%) feel that their business stand to get better in the future. Another (33.3%) do not expect any future changes whereas 25%thought that their businesses were headed for a gloomy future.
Table 4.3.16: major causes of unemployment among the youths
| Causes | Frequency | Percentage |
| No opportunities | 38 | 31.3 |
| Low education | 22 | 18.8 |
| Corruption | 15 | 12.5 |
| New technology | 15 | 12.5 |
| High population | 30 | 25.0 |
| Total | 120 | 100 |
Figure 4.3.16: Major causes of unemployment among the youths
Most of the youths interviewed (31.3%) feel ha the greater cause of their unemployment is due to lack of job opportunities in the economy. Low levels of education accounts for 18.8% as a cause of unemployment. Population explosion is second to lack of job opportunities with contribution of 25.0%. Corruption and emergence of new technologies account for 12.5% each.
Table 4.3.17: The most successful investment activity in Eldoret Town
| Investment | Frequency | Percentage |
| Business | 90 | 75 |
| Employment | 30 | 25 |
| Total | 120 | 100 |
Figure 4.3.17: The most successful investment activity in Eldoret town
According to findings of this research Eldoret youths feel that the most workable solution to the rampant job scarcity is business investment. This is attributed to 75% with regard to solving unemployment .Only 25% think that formal employment can solve their problem.
The government and other stakeholders should provide enough funding to the people operating or interested in operating their own businesses at low interest rates. According to the research findings financial constraints was a major problem encountered by most entrepreneurs. Ample financial assistance at low rates would encourage many people to venture into business. Good credit facilities should be made accessible with minimal complications. This would attract large numbers into the informal sector, reducing the number of the unemployed youths.The government should decentralize industries. Rural urban migration was as a result of unemployment. People move from rural to urban areas in search of jobs and they settle in areas near the town since that is the place they can afford to stay and this leads to the growth of the nearby areas. High population was found to be the one of the most important cause of unemployment. The government should come up with policies regulating population.
The main purpose of this study was to investigate the role played by small-scale enterprises in alleviating unemployment among the youths in Eldoret town. In the light of these findings, suggestions were made for possible solutions in curbing unemployment problem. In this chapter a summary of the findings as revealed by theory, literature review and data analysis will be given. The chapter will close with proposed changes and suggestions for further research.
The problem of unemployment currently requires a multi-disciplinary approach when working for recommendations and solutions. Current trends of globalization, the replacement of human resources by new technologies and economic development in general need to be taken into considerations. The informal sector is a fast growing phenomenon in our country and plays a huge role in the livelihoods of people living in developing countries.
The research findings supported both alternative hypothesis that majority of the youths who live in Eldoret town are employed in the informal sector and small-scale enterprises have created job opportunities for youths in the town. The null hypothesis in both cases were however rejected.
The first alternative hypothesis states that majority of the youths in Eldoret town are employed in the formal sector. It was supported by the data collected a percentage of 75% showed that most of the youth engage themselves in the activities of informal sector. There was a strong correlation between unemployed youths and engagement in informal sector.
The null hypothesis that state that majority of the youth engage in the formal sector was rejected because only a small percentage of 25% engage in formal employment and there was a weak correlation between youths and formal employment.
The second alternative hypothesis states that small scale enterprises have created job opportunities for the youths in Eldoret town. This hypothesis was supported by the data that showed 53.6% of the youths engage in small-scale enterprise to be self- reliant and 23.2% as a result of lack of employment. The null hypothesis that state that small-scale enterprises leads to unemployment was strongly rejected by the research findings because the youths who are not employed in the formal sector sought informal sector for employment.
To promote and develop small-scale entrepreneurship, the government and other stakeholders have a major role in a number of ways:
1. The government should introduce policies that would promote the informal sector. One major policy would be reduction of competition. Small-scale enterprises experience competition from imported goods which are imported cheaply into the country, thus they may even sell cheaper than locally manufactured goods, creating unfair competition. Thus, the government should impose high taxes on importation of goods to discourage importation and encourage the use of locally manufactured goods.
2. Education need to play a central role in combating unemployment (although education alone does not create work places and employment). The education sector has the responsibility to prepare young mind for employment, but also the duty to infuse some youth minds with the necessary skills to find employment or even become entrepreneurs and employ themselves
3. Today most people attitudes are very negative towards the informal sector. Many people regard working in the formal sector as degradation and not prestigious, thus many avoid it (informal sector) at all costs. Also, we have a problem of people degrading locally produced goods and services provided by the informal sector. Thus many people will buy and opt for imported products as opposed to local products, reducing the market for goods produced in the local industry. It is therefore important for people to change their attitudes towards locally produced goods and services, and actually go for these as opposed to the imported ones.
4. The government should have a policy of supporting vocational training and employment creation programmes. Government would be well advised to also focus on the psychological strengthening of those currently unemployed. Stress is key role for psychological state of the unemployed. Their self-esteem and signs of depression vary depending on their level of stress experience. Thus, it should be an aim to equip the unemployed to cope with stress, and in doing so, also better equip them in finding a proper job or in becoming self-employed. It cannot be expected of a person with low self-esteem to become a successfully entrepreneur or even just a productive employee. Psychological training programmes could be organized for unemployed people to strengthen their self- esteem and infuse confidence in their capabilities.
5. Psychological training programmes could assist those who want to become entrepreneurs and in particular, offer assertiveness training to them (e.g. How to assert oneself when applying for a bank loan, when dealing with suppliers and customers who do not want to pay.
6. Training programmes in marketing skills could be offered, together with skills in the administration of one’s own business, particularly the latter are often neglected by small business entrepreneurs and sooner or later the success of their business become undermined by lack of proper filling system, an efficient accounting system, manageable time schedules.
7. The government should improve the infrastructures in Kibera slums to make the roads passable by the entrepreneurs and their customers. The researcher found out that the infrastructures are very poor and it was difficult to get into the premises of the dwellers.
This study was carried out in Eldoret town among the unemployment youths. The question remains open as to what unemployed people from other regions undertake in order to find unemployment and make a living. More research would be necessary and should target other groups such as unemployed women, unemployed university graduates or job seekers who actually have qualifications within Kenya constellation.
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The contributions of small-scale enterprises in creating employment among the youths in Eldoret town.
Introduction
This study is a partial fulfillment of the requirements of my under graduate degree in Bachelor of Science in Entrepreneurship studies. It aims at establishing the role played by small-scale enterprises in alleviating unemployment among the youths. Your assistance in giving honest response will enable me come up with accurate findings.
Instruction: Tick ( ) or fill where applicable Please don’t write your name on the questionnaire
SECTION A: General Questions
1. What is your gender?
Male ( )
Female ( )
2. Tick your age bracket
15-24 ( )
25-34 ( )
35-44 ( )
45-54 ( )
55 and above ( )
3. What is your marital status?
Single ( )
Married ( )
4. Tick the category in which your number of children follows
None ( )
1-4 ( )
4-8 ( )
Above 8 ( )
5. (a) Where do you live?____________
1 SECTION B
Unemployment among: Youths
1. Level of formal education:
Never attended school. ( )
Primary school ( )
Secondary school ( )
College ( )
University ( )
2. (a) Have you had any other training or education since leaving school?
Yes ( )
No ( )
(b) If yes, what kind?
Polytechnic ( )
Apprenticeship ( )
Technical training ( )
On job training ( )
Others specify ( )
3. (a) Are you employed or self-employed?
(b) If you are self-employed, what type of enterprise do you have?
4. (a) What were you doing before you started this enterprise? Employed ( )
Just completed school ( )
Stayed at home ( )
Others,
specify______________________________________
(b) Why did you start your own business? ___________:______
5. (a) What type of structure is your enterprise? Permanent ( )
No structure ( )
Others specify___________________
2 (V. Describe briefly, products/activities deal with in this enterprise
6(a) What is your major source of income?
Employment ( )
Self-employment ( )
Others, specify_____________________________________________
(b) How does it help your family?
A lot ( )
Little ( )
Not at all ( )
7. How did you finance your business?
Loan ( )
Savings ( )
Family assets ( )
Others, specify_______.____________________________________________
8(a) Did you get financial aid from external sources in running your business? Yes ( )
No ( )
(b) If yes, which are these sources?
Government ( )
NGOs ( )
Others, specify_________________________________________________
9(a) Do you feel that such help benefits your business?
Yes ( )
No ( )
(b) Explain your answer
SECTION C
Small scale enterprises reduces unemployment
1. What made you start small scale enterprise? Unemployment ( )
Self-independence ( )
Others, specify_______________________
2. How do you foresee the future of your business? Promising ( )
Gloomy ( )
No change ( )
Others, specify__________________________
3(a) Do you have any plans to ensure business survival and growth in the Future?
Yes ( )
No ( )
(b) Explain your answer.___________________________________________
4(a) What do you think are the major causes of unemployment among school leavers? ________________________________________
(b) What do you think should be done to solve the problem of unemployment?
5(a) Briefly state the advantages of small scale enterprises.
(b) What are the disadvantages of small scale enterprises?
6(a) Do you have any income generating activity? Yes ( )
No ( )
(b) If yes, explain________________________
7. (a) Did you get a job immediately after leaving school? Yes ( )
No ( )
(b) Explain your answer—————————————-
8. In your opinion, which has been the most-successful investment activity in Eldoret town?———————————————————————–——–
9. Give suggestions, on how to improve the development activities in Eldoret town _______________________________________________________
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