How Stock Sourcing Affects Growth of Small and Medium-sized Enterprises in Imenti North Sub-County, Kenya

Abstract

Procurement optimization has become critical in fostering growth of businesses. Quality goods issued by suppliers generate revenue that translates to economic growth. However, growth of SMEs in Imenti North Sub-County has been low. The purpose of this study was to analyze the influence of stock sourcing on growth of small and medium-sized enterprises in Imenti North Sub-County, Kenya. According to micro and small enterprises Act number 55 of 2012, and MSE bill, Sessional Paper No. 2 of 2005, SMEs comprises firms that have staff population of between 10-100 employees, and a turnover of Kshs500, 000 to 30,000,000. There are 31 SMEs specialized as supermarkets, hotels and restaurants, manufacturing firms, assembly firms, whole sale and retail outlets, and processing firms. The study was guided by resource-based view theory and used descriptive survey research design to collect data from a target population of 10 SMEs specializing in manufacturing in Imenti North Sub-County. Simple random sampling method was used to select 20 percent of a target population of 250 respondents. Hence, 50 Head of Departments in sales and marketing, operations, compliance, finance and procurement officers were selected and issued with closed-ended questionnaires. Data was analysed using SPSS. Descriptive statistics such as mean, percentage, frequency, standard deviation were computed while hypotheses were tested using regression analysis. The study found out that unitary, stock-sourcing predicted seventy five percent of growth of SMEs variable. The remaining percentage was due to other factors. The study concluded that stock sourcing had a positive significance on the growth of SMEs in Imenti North Sub-County, Kenya. The study reccommends that procurement oversight authority in Kenya develops policies to ensure that various suppliers are vetted and the information availed to SMEs owners for making stock sourcing decisions.