E-Procurement And The Performance Of Small And Medium Enterprises In Nairobi City County Kenya

Abstract

Small and Medium Enterprises carry out a significant task to economic function of a country. They are main source of income to numerous entrepreneurs also they offer job opportunities mostly to the youths. However, despite the crucial role the SMEs play, they face numerous challenges which have impacted on their performance with some closing down. The purpose of this survey was to investigate influence of e-procurement on performance of Small and Medium Enterprises within City County of Nairobi, Kenya. In this study specific objectives entailed examining influence of e-sourcing, e-tendering, e-payment and e-invoicing on the performance of Small and Medium Enterprises in City County of Nairobi. Schumpeter’s Entrepreneurship Theory, Drucker’s Entrepreneurship Theory and Economic Theory of Entrepreneurship were adopted to anchor the research study. During the study, descriptive research design was adopted. Target population comprised of 3000 licensed and registered Small and Medium Enterprises working within City County of Nairobi, Kenya. Sample size comprised of 97 Small and Medium Enterprises owners or managers. The unit of observation comprised Small and Medium Enterprises owners and managers. From the target population, stratified random sampling technique was utilized to select 97 respondents. The study used structured questionnaires to collect data. Before data collection exercise, the researcher conducted a pilot study within Kiambu County so as to assess validity and reliability of the study tools. Secondary data however was used to supplement primary data. Data was gathered from journals, reports, web sources and other relevant publications. Quantitative data was analyzed using descriptive statistics and inferential statistics data with the assistance of Statistical Package for Social Science (SPSS). In addition, descriptive statistics included percentages and frequencies. Correlation analysis and regression analysis was employed to determine the impact of e-procurement on the performance of the Small and Medium Enterprises. Charts as well as frequency tables were used to present findings. The study found that e-tendering has no significant influence on the Small and Medium Enterprises performance within Nairobi, Kenya. However, e-sourcing has a significant influence on performance of Small and Medium Enterprises in Kenya Nairobi. In addition, e-invoicing has a significant impact on Small and Medium Enterprises performance within Nairobi, Kenya. Further, e-payment has a significant influence on Small and Medium Enterprises performance in Nairobi, Kenya. The recommends of this study is that Small and Medium Enterprises should adopt and utilize e-tendering to rationalize procurement process and minimize the costs involved. Additionally, small and medium enterprise should adopt e-invoicing to reduce costs associated with storage, printing and delivery of paper invoices. The study further recommends that all Small and Medium Enterprises should adopt e-payment to improve performance by improving efficiency in payments and reducing errors related to cash transactions. Further, small and medium enterprises should adopt e-sourcing as it increases access to numerous suppliers and reduce time taken to award a contract.