Effects of Household Revenue Level Due to Rural Electrification on Growth of Small and Medium Enterprises (SMEs) in Coastal Region, Kenya

Abstract

Rural electrification is a very important process to provide access to modern energy, especially to the poor people in developing countries like Kenya. Rural electrification programs in Kenya focus on providing development assistance through the supply of electricity services to stimulate economic productivity and enhance the quality of life in rural areas. These projects do not start with an assessment of the needs of the people that they are meant to serve. The rural electricity evaluation programs at present are confined to measuring only quantifiable variables, such as the number of households electrified. Moreover, the impact of electrification on rural SME operations is also seldom evaluated. The objective of this research study was to establish the effects of household revenue levels due to rural electrification on the growth of small and medium enterprises in the coastal region of Kenya. The study area was the Coast region. This study adopted an exploratory research design. The target population for this study comprised 172,556 small and medium enterprises (SMEs) registered in the coastal region by 2023. The study adopted multi-stage sampling, systematic and simple random sampling techniques due to the large target population involved. A total of 381 responses were received out of a target population of 399 respondents. This represented a 95.5% response rate from these study results. The majority of the respondents agreed that there was an extent of revenue level growth of small and medium enterprises (SMEs) in Kenya, and the majority of the respondents agreed that there was an extent of revenue level growth of small and medium enterprises (SMEs) in the coastal region, Kenya. The results show a strong positive correlation coefficient of 0.944, which is statistically significant (p<0.05), showing that there is a significant effect of the revenue level of the household due to electrification on the growth of small and medium enterprises in the coastal region of Kenya. Further, the overall revenue level is positively affecting the growth of small and medium enterprises in the coastal region of Kenya. The study recommends that SMEs emphasize the use of machines as it enhances income due to improved quality products and services.