EFFECTS OF NON-GOVERNMENTAL ORGANIZATIONS ACTIVITIES ON SUSTAINABILITY OF SMALL BUSINESS ENTERPRISES IN KENYA. CASE OF TUMAINI FUND FOR ECONOMIC DEVELOPMENT INTERNATIONAL.

Abstract

Despite the growing contribution of small businesses to the GDP in Kenya and in many other economies, they continue to struggle for survival and the help from Non-governmental Organizations (NGOs) does not seem to provide a remedy. There is need to provide an explanation as to how the relationship between NGOs and small businesses manifests. The purpose of this study is to establish the effects of NGOs activities on sustainability of small businesses. Specifically, the study sought to establish the effect of financial assistance by NGOs, technical assistance by NGOs, training services offered by NGOs and formation of pressure groups facilitated by NGOs on the sustainability of small businesses in Nairobi County. This research was a descriptive study using cross-sectional survey method. The population target comprised all the 134 registered small enterprises located within the Nairobi County that receive assistance from the Tumaini Fund for Economic Development International (TFEDI). This research study used a stratified random sampling method to select 40% of the respondents. The data was collected through a structured questionnaire and analysed using appropriate statistical tools. The quantitative data in this research was analysed using descriptive statistics such as the frequency, percentage, mean and standard deviation while regression analysis at 95 % confidence level was used to determine the relationship among the variables. The findings were presented in frequency tables, charts and graphs. The study found that financial assistance by NGOs negatively affectsfinancial sustainability of small businesses as the NGOs offer funding with flexible payment, without collateral and at lower interest rates while at the same time offering saving schemes which are very beneficial. The study also deduced that technical assistance affect financial sustainability of small businesses with a coefficient of 0.406 and p=0.002. The study finally concludes that formation of pressure groups facilitated by NGOs also affects the sustainability of small businesses in Nairobi County with a coefficient of 0.219 and p=0.047. The study therefore recommends that the NGOs should be quick to measure the success rate of SMEs by considering factors like high repayment, outreach and financial sustainability and growth, but these may not be successful if their activities do not reflect in the growth of SMEs