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Small Enterprise Policy And Development(Entr 335) Question Paper
Small Enterprise Policy And Development(Entr 335)
Course:Business Administration
Institution: Kenya Methodist University question papers
Exam Year:2012
TIME: 2 HOURS
INSTRUCTIONS
Answer question and any other two questions.
SME POLICY IN KENYA: ISSUES AND EFFORTS IN PROGRESS
Small and medium enterprises (SMEs) have been known to contribute greatly in economic growth of both developed and developing countries. According to a report published in the journal of Economics Literature in the year 2000 about the manufacturing firms in developing countries the share of SMEs in employment tends to be higher in developing countries, which are typically move focused on small-scale production. As such, policy provisions remain fundamental in propelling these enterprises towards self-sustenance and realization of their full potentials in contributing towards economic growth.
In Kenya for instance SME operation cut across almost all sectors of the economy and sustain majority of households. This was well recognized by the 2003, National Budget Speech day speech delivered by Hon. David Mwiraria the then Minister for Finance who noted that "SME activities form a breeding ground for businesses and employees, and provide one of the most prolific sources of employment. Their operations are more labour intensive than the larger manufacturers". As such, policy provisions would mean boosting not only the operations of these enterprises but the country’s economy as well.
The development of the private sector varies greatly throughout Africa. According to an article which appeared in a UN based booklet handbook for local investors, "SMEs are flourishing variedly well in various countries in Africa. In South Africa, Mauritius and North Africa, these enterprises are doing well. This could be attributed to fairly modern financial systems and clear government policies in favour of private enterprise."
While this is commendable in other countries, the rise of medium sized enterprises with a considerable swing in the middle class has been hindered by political instability or overdependence on raw materials as the main engine of economic advancement. The article observes that in the Democratic Republic of Congo. Most SMEs went bankrupt in the 1990s as a result of the looting in 1993 and 1996 during the civil war. In Congo, Equatorial Guinea, Gabon and Chad, the dominance of oil has slowed the emergence of non-oil businesses.
Between those two extremes, Senegal and Kenya have created conditions for private sector growth but are still held back by an inadequate financial system and lack of sound policy provisions.
Give five parameters that can be used to distinguish the definition of SMEs and MSEs in Kenya.
(5 Marks)
According to the case "some provisions have been made towards gender mainstreaming" identify six policy issues that have been addressed by the Kenyan government to promote women entrepreneurs in Kenya.
(12 Marks)
As an MSE policy expert, suggest to the Kenyan government seven characteristic that can enrich the quality of policies articulated to provide a suitable regulatory environment for MSEs.
(7 Marks)
Give three specific examples of sessional papers that have been articulated by the Kenyan government of specifically address the MSE sector. (3 Marks)
The purpose of government policy is to facilitate the creation of an enabling policy and regulatory environment that will increase competitiveness of MSEs in Kenya. Give three expected outcomes of these policies.
(3 Marks)
Question Two
The government of Kenya is committed to facilitating partnership building among all key stakeholders in the MSE sector. Identify four such stakeholders.
(4 Marks)
Showing the meaning of policy, explain the main steps involved in formulating policies.
(16 Marks)
Question Three
Briefly explain three approaches in designing policies.
(6 Marks)
Mention seven hardship experienced by MSE operators in sourcing for financing. For each problem suggest a possible solution.
(14 Marks)
Question Four
With specific examples discuss five market-oriented business development services that are provided by the Kenyan government to the MSE operators.
(10 Marks)
Discuss the critical role of policy in the developing economies.
(10 Marks)
Question Five
Suggest five reasons why the many policies articulated by the Kenyan government have not been very productive in addressing problems facing MSEs
(5 Marks)
What has the government done in order to address the following issues that sometimes hinder the effective operation of MSEs?
(15 Marks)
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