Effect of self-Efficacy on the Performance of Small and Medium Enterprises in Kenya
Abstract
Entrepreneurial mindset is one possible strategy for enhancing the performance of SMEs. This study, therefore, sought to investigate effect of self-efficacy on the performance of small and medium enterprises in Kenya. The focus of the research was to measure the entrepreneurs self-efficacy and how this attribute contributes to the performance of an SME. The study adopted survey research design focusing on a population of 268,100 licensed small and medium enterprises in Nairobi County in Kenya, from which a sample of 400 firms were selected through a multi-stage probability sampling method where stratified sampling method was used first and then simple random sampling from the strata for the 17 constituencies under the Nairobi county. Quantitative data was collected using questionnaires and analyzed using Statistical Package for Social Science (SPSS) and Microsoft Excel. The study results established that entrepreneur self-efficacy had positive and significant effect on performance of small and medium size enterprises in Kenya. The study finally concluded that self-efficacy of an entrepreneur is the foundation on which all other entrepreneurial mindset attributes such risk taking, innovativeness and creativity are built hence it is a good predictor of high business performance. Entrepreneurs with high self-efficacy steer their business to profitability even in turbulent business environment. The study finally recommends that SMEs owners should possess high self-efficacy and the belief and ability to steer their businesses to high heights, such beliefs will ensure they run their enterprises with resilience especially during turbulent times.
Keywords: Entrepreneurial mindset, Kenya, SMEs and Self-Efficacy
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