Nexus between Demographic Characteristics of Micro and Small Enterprises Owner-Managers and their Perceptions of Risk in Bungoma County, Kenya

Abstract

This paper explores demographic characteristics that define Micro and Small Entrepreneurs often overlooked by business development services based on the hyped perception that the entrepreneurial process can be actualised by all and sundry if they have the push and pull to take risks. The author argues that despite the contributions made to the global economies in terms of Gross Domestic Product and employment creation, demographics associated with successful entrepreneurial processes based on perception and assessment of risk among entrepreneurs remain unaddressed, yet a close interrogation of critical demographics may influence accurate packaging of business development services. The discussion is based primarily on a systematic literature review of entrepreneurial traits, and demographic characteristics and analysis of a survey finding carried out on MSEs in Bungoma County. The theory and model reviewed to reflect past studies and form part of the study’s theoretical underpinning were the theory of firm formation by Kihlstorm and Laffont together with the model of entrepreneurial choice by Jovanovic.  A mixed methods research design was employed. The study concludes that there is a need for business development services to be aligned along the four critical demographic characteristics: age; ethnic background; training and education to empower Micro and Small Enterprises on risk perception and assessment together with coping skills so that their failure rates are minimised. This will avert mass unemployment that has reached disaster proportions in entrepreneurial hubs of Kenya arising from MSEs’ high failures within their first year of establishment. Resultant MSEs’ sustainability will complement government efforts on unemployment and livelihood options for the masses.