Kenya : Kibera"s small enterprise sector -- baseline survey report

One-third of all households have a small enterprise activity, and 11 percent of adults are engaged in small enterprises on a full-time basis. On average, Kibera"s small enterprises have 1.8 workers, and most (99.5 percent) have 10 or fewer workers. Over two-thirds of enterprises (68.4 percent) are involved in trade activities, most frequently vending basic necessities such as food, fuel, and water. Of the 22 percent of enterprises in manufacturing, the bulk are in tailoring, shoemaking, and carpentry. The service sector, which makes up 9.2 percent of the population, is dominated by the activities of hairdressing and renting rooms. Kibera"s enterprises are found mainly along paths and inside people"s residences, with only one-fifth located in market areas. Few linkages, either forward or backward, exist between Kibera enterprises; however, they depend heavily on non-Kibera businesses for inputs and, in a few cases, for subcontracts. The sector is evenly divided between men and women entrepreneurs. Although over half (60 percent) of Kibera"s enterprises have not grown in size since they opened, the overall average growth of enterprises (in number of workers) has been 20 percent a year, reflecting sizable dynamism in the sector. High-growth sectors are manufacturing and construction. In addition, male-owned businesses and the more visible roadside and market-based businesses show higher-than-average growth rates. The average enterprise operates for about three years. Reasons for business closure often do not depend on the business itself, but reflect other opportunities facing the entrepreneur, personal considerations, and outside influences on the business such as vandalism, harassment, or natural calamity. Once businesses are closed, many entrepreneurs do not re-enter the small enterprise sector but pursue employment or end up without any income-earning activity. Striking differences emerge in male- and female-run businesses. Female-run businesses are more common in commerce, whereas businesses run by males are dominant in manufacturing, construction, and services. Female-run businesses start smaller, grow more slowly, and live shorter periods than their male-run counterparts. In addition, women tend to close their businesses for personal reasons, whereas men are more likely to base choice of activity on the potential of the activity itself. Furthermore, men are more likely to re-enter business or get a job in the formal sector, while women often end up without any income-earning activity. (Author abstract)