Venture Capital (VC): Impact on Growth of Small and Medium Enterprises in Kenya

By Ben White on March 13, 2012

Lack of information is one of the key challenges we face in SME development. At VC4Africa we run polls and conduct research from across the VC4Africa network. At the same time we work to profile and highlight major studies or reports we feel add value to the space.

Venture Capital (VC): Its Impact on Growth of Small and Medium Enterprises is a recent report produced by Memba S. F. and Gakure W. R. at the Karanja K. School of Human Resource Development at the Jomo kenyatta University of Agriculture and Technology in Nairobi, Kenya. You can see an abstract and a link to more of the report below.

Venture capital has had a significant impact on Small and Medium Enterprises (SME) in the developed countries. Small businesses have been and are the stepping stone of industrialization in these countries. Among the developing countries and especially Kenya venture capital has been present since independence yet industrialization is slow. The purpose of this study was to find out the impact of venture capital on growth of Small and Medium Enterprises (SME). The lack of finance has been cited as a major contributor to SME failure in Kenya. Venture capital which is the best source of business finance has been in Kenya for long but little used. The methodology adopted was collection of data before and after use of venture capital. The findings in this study revealed that venture capital has an impact on growth of SME they finance. The study has demonstrated that use of venture capital can be profitable in Kenya even in an inauspicious political and economic climate. The study concluded that SME that use venture capital experience improved growth and thus more SMEs should be encouraged to use this form of finance if the country has to achieve its vision 2030.

See the report: VC Kenya Report

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