Role of Public Procurement Preference Scheme on the Growth of Small and Medium-sized Enterprises in Nyamira County, Kenya

  • Rosasi Ombeo Thomas Murang’a University of Technology
  • Oteki Evans Biraori Murang’a University of Technology
  • Grace Mwangi Murang’a University of Technology
  • Ruth Muriithi Murang’a University of Technology
Keywords: Public Procurement Preference Scheme, Growth, SMEs, Waiver on a Bid Bond, AGPO Registration
Share Article:

Abstract

The focus of the study is to investigate the role of public procurement preference schemes in enhancing the growth of small and medium-sized enterprises. The general objective of the study was: To investigate the role of public procurement preference schemes in enhancing the growth of small and medium-sized enterprises in Nyamira County, Kenya. The specific objectives included; establishing the role of 30% preference on the growth of small and medium-sized enterprises, to investigate the role of waiver of bid bond on the growth of small and medium-sized enterprises, to establish the role of local firm preference on the growth of small and medium-sized enterprises and to assess the role of easy access to procurement opportunities registration on the growth of small and medium-sized enterprises. The study was guided by agency theory. A descriptive research design was applied to the study. The study population included 35700 registered and licensed SMEs, from where a sample of 391 was arrived at by Yamane’s formula. Data collection involved the use of self-administered questionnaires. Both descriptive and inferential statistics were used to perform data analysis. The results of the model summary indicate that R2 equals 0.498 at a 0.05 significance level, thus revealing that 49.8 % of the SME growth can be accounted for by the public procurement preference scheme. The study concluded that there was a positive influence of public procurement preference schemes on the growth of small and medium-sized enterprises. The study recommended that SMEs may team up with one another under joint bidding in order to get higher chances of preference and also compete with large-sized firms for public procurement opportunities

Downloads

Download data is not yet available.

References

Arockiasamy, A., Basheka, B. C., Bbaale, E., Davids, G. J., Dorasamy, N., Fagbadebo, O. M., ... & Teera, J. M. (2022). State-owned enterprises in Africa and the economics of public service delivery (p. 290). AOSIS.

Akoth, M. (2017). Effect of e-procurement on service delivery among county Governments in western Kenya (Doctoral dissertation, Maseno University)

Beal Partyka, R. (2022). Supply chain management: an integrative review from the agency theory perspective. Revista de Gestao, 29(2), 175-198.

Chrisidu-Budnik, A., &Przedańska, J. (2017). The agency theory approach to the public procurement system. Wroclaw Review of Law, Administration & Economics, 7(1), 154-165.

Davis, J., Batchelor, J. H., & Kreiser, P. (2019). The influence of organisational task environment and firm size on top-executive compensation contracts. Journal of Small Business & Entrepreneurship, 31(1), 21-42.

Delbufalo, E., & Delbufalo, E. (2018). Agency theory and sustainability in global supply chain (pp. 33-54). Springer International Publishing.

Forman, J., Creswell, J. W., Damschroder, L., Kowalski, C. P., & Krein, S. L. (2008). Qualitative research methods: key features and insights gained from use in infection prevention research. American journal of infection control, 36(10), 764-771.

Hamisi, S. (2011). Challenges and opportunities of Tanzanian SMEs in adapting supply chain management. African Journal of Business Management, 5(4), pp.1266-1276.

Hansen, A., Kimeria, C., Ndirangu, B., Oshry, N., and Wendle J. (2012). Assessing Credit Guarantee Schemes for SME Finance in Africa: Evidence from Ghana, Kenya, South Africa and Tanzania. AFD Working Paper no. 123.

Israel, B., & Kazungu, I. (2019). The role of public procurement in enhancing growth of small and medium-sized-enterprises: experince from Mbeya Tanzania.

Jabbie, M., & Saffa, M. (2021). Functional Performance: A Sustainable Approach to Economic Optimality. In Industry, Innovation and Infrastructure (pp. 380-391). Cham: Springer International Publishing.

Johnson, F., Leenders, M. R., & Flynn, A. E. (2021). Purchasing and supply management. McGraw-Hill Companies, Inc.

Kazungu, I. and Panga, F. (2015). Empowering small and medium enterprises (SMEs) to harness public procurement opportunities. International Journal of Economics, Commerce and Management, 3(3), pp.112-131.

Kazungu, I., Matto, G., & Massawe, H. (2017). Social Media and Performance of Micro Enterprises in Moshi Tanzania, International Journal of Academic Research in Business and Social Sciences, 7(5), 144-157.

Kazungu, I., Ngugi, P. K., Rotich, G., and Odhiambo, R. O. (2018). Dynamics of Marketing Support Services and Performance of Handicraft Exporting Micro and Small Enterprises in Tanzania, International Journal of Economics, Commerce and Management, 6(2), 54-78.

Kidalov, M. and Snider, K. (2011). US and European Public Procurement Policies for Small and medium-sized enterprises (SME): A Comparative Perspective. International Business and Politics, 13(4), pp.1-43

Kim, M. K., Narayanan, S., & Narasimhan, R. (2020). Supply network architecture and its contingent impact on innovation performance: A field study. International Journal of Production Economics, 224, 107551.

Kumar, L., Nadeem, F., Sloan, M., Restle-Steinert, J., Deitch, M. J., Ali Naqvi, S., ... & Sassanelli, C. (2022). Fostering green finance for sustainable development: A focus on textile and leather small medium enterprises in Pakistan. Sustainability, 14(19), 11908.

Loader, K. (2017). Are public sector procurement models and practices hindering small and medium suppliers? Public Money & Management, 31(4), 287–294.

Mulae Elizabeth, (2022). The Micro and Small Medium Enterprises Development in Kenya The Trade Law Centre. https://msea.go.ke/wp-content/uploads/2021/07/MSEs-Policy.pdf

Munene S. M. (2018), Public Procurement and Access to Government Procurement Opportunities (AGPO) Policy; unpublished Master’s thesis, University of Nairobi

Ng’ang’a, S. (2012). Strategic response by Kenya Airways to challenges in the global business arena (Doctoral dissertation, University of Nairobi).

Ngugi, P. K. (2012). Challenges hindering sustainability of small and medium family enterprise after the exit of the founders in Kenya. PhD thesis Jomo Kenyatta University of Agriculture and Technology.

Obanda, P. W. (2011). Small and medium enterprises (SMEs) and Public Procurement Contracts in developing countries.

OECD (2018). “SMEs in public procurement: Practices and strategies for shared benefits,” OECD Public Governance Reviews, https://www.oecd.org/publications/smes-in-public-procurement-9789264307476-en.htm.

Peprah, A., Mensah, O., and Akosah., B. (2016). Small and medium-sized enterprises accessibility to public procurement: SMEsentity perspective in Ghana. European Journal of Business and Social Sciences, 4(11), pp.25 – 40.

Ross, S. A. (2016). The economic theory of agency: The principal’s problem. The American economic review, 63(2), 134-139.

Saastamoinen, J., Reijonen, H., & Tammi, T. (2018). Should SMEs pursue public procurement to improve innovative performance? Technovation, 69, 2-14.

Saxena, S. (2012). Value for Money: Theoretical Framework and Practical Challenges in Implementation. [http://tscpl.com/wpcontent/uploads/2012/12/TSCPL]. Site visited on 12/04/2018.

Sumba, G. K. (2015). Influence of the implementation of access to government procurement opportunities programme on business growth in youth owned enterprises in Murang’a south sub county, Kenya (Doctoral dissertation, University of Nairobi).

World Bank, (2016). Procurement report in investment project financing Goods, Works, NonConsulting and Consulting Services. Washington, DC: World Bank.

Published
14 August, 2023
How to Cite
Thomas, R., Biraori, O., Mwangi, G., & Muriithi, R. (2023). Role of Public Procurement Preference Scheme on the Growth of Small and Medium-sized Enterprises in Nyamira County, Kenya. East African Journal of Business and Economics, 6(1), 277-289. https://doi.org/10.37284/eajbe.6.1.1348