“Employment creation in Kenya: exploring the Jua Kali enterprises”

In developing countries, non-agricultural micro-sized informal enterprises are known to create employment and income generation opportunities. However, due to the com-plexity and unregulated nature of the sector and, in particular, the Jua Kali, achiev-ing efficient and effective sustainability remains a major challenge for the owners and policy makers alike. Since many unknown barriers continue to impact the effective and efficient development of the aforementioned enterprises, the aim of this study was to determine the barriers to effective job creation in a developing country’s informal micro enterprise industry using evidence from the Jua Kali sub-sector in Kenya. The data from a survey conducted among a random sample of 118 enterprises, which were listed in one Jua Kali Association Directory Nairobi, were analyzed using exploratory factor and regression analyses. Strong evidence supports the notion that some socio-demographic variables such as age, education and marital status have an impact on entrepreneurial activities in the Jua Kali sector. Training, advise and consultation for Jua Kali entrepreneurs need to be enhanced, as this will be necessary to advance their business prowess. The results contribute to studies in entrepreneurship and management by demonstrating that designing and implementing the systems, activities and programs for supporting employment creation through the informal sector can improve productivity at all levels of the economy and improve the living of these entrepreneurs.


Background and importance of the informal sector
The informal sector is widely acknowledged in contemporary literature as the key contributor to economic development in low-income economies, providing both employment and household livelihoods through numerous entrepreneurial activities.The informal economy is referred to as unincorporated individual economic units or enterprises, which employ less than five permanent workers and produce for the market (Charmes, 2012).It represents the key resource for economic improvement and growth and plays an important role in the assessment of a country's performance (Obare, 2015; Safavian, Wimpey, & Amin, 2016; Williams & Horodnic, 2015).However, it should be noted that the concept and boundaries of the informal sector have been linked to those who operate in it (Sallah, 2016).
The informal sector is very small, unregistered or unregulated, requires low capital, has mostly self-employed workers, although may hire a few people and is labor intensive (Obare, 2015).Regionally, it has been argued that small-scale businesses (both formal and informal) have played a pivotal role in bridging the unemployment and poverty gaps (Ekpe, 2011; Meghana, Demirguc-Kunt, & Maksimovic, 2014), accounting for over fifty percent of total employment (Charmes, 2012;Kerr, Wittenburg, & Arrow, 2013) and creation of over 90% of all new jobs (Holt & Littlewood, 2014).
The informal sector in Kenya is large and vibrant, accounting for over 95% of businesses and entrepreneurs (Safavian et al., 2016), and as Bull, Daniels, Kinyanjui and Hazeltine (2016) assert, it is a vital job creation engine in Kenya.The Jua Kali sub-sector consists of support service businesses like welders, painters, scrap metal dealers, among others, and they those deal with metal engineering, furniture, clothing (new and used -aka mitumba), kitchen ware, restaurants, hotels, hawking and other forms of trading.Thus, this sector has a huge potential for enhancing job creation through establishment of industries and initiation of commercial enterprises, and in the process providing income for those with no other means of survival.
In response to job and wealth creation, a number of studies and reports (see, for instance, African Development Bank Report, 2017; Holmes, McCord, Hagen-Zanker, Bergh, & Zanker, 2013; Katua, 2014) advocate for policies and interventions that would continue to create favorable environments for business start-ups and/or self-employment.It has also been documented in extant literature that in Africa, over 22 percent of the working age populace start new businesses (Copley, 2017) and through such businesses, a significant number of people create or get employment.This implies that the share of informal and/or small enterprise category employment exceeds that of large industries in Africa (Meghana et al., 2014).Holmes et al. (2013) assert that entrepreneurship is a well-known source of employment creation, ensures stability in countries and helps reduce poverty.In the same vein, Atiase, Mahmood, Wang and Botchie (2017) argue that entrepreneurship contributes to the gross domestic product (GDP), and Kenya's Economic Survey Report (2012) indicated that the sector contributed about 25% to the GDP.
Although it is apparent from the above that need for job creation is critical in a developing country environment, globalization, free market policies and trade neo-linearization generate multiple problems for the very small businesses or the informal sector (Obare, 2015;Were, 2016).The Jua Kali sector enterprises in Kenya continue to demonstrate underperformance and lack of competitiveness (Micro and Small Enterprises Authority, 2013) in spite of spirited efforts by the Kenyan government to help grow them, since it has been identified as a priority strategic area for employment creation.It would seem that there are many unknown barriers impeding the development of the sector and these must be identified through research so that they can be managed.Unless the barriers are identified and attended to, businesses would continue to underperform and/or even fail.More specifically, there is a need for business owners and other stakeholders working in this Jua Kali sub-sector of the economy, to have a full grasp of the barriers to effective business performance.Unfortunately, no cogent understanding of such barriers is evident to stakeholders (Atiase et al., 2017;Fumo & Jabbour, 2011;Guma, 2015).In addition, there are also very few academic sources accessible, which outline even a close 'framework' of such barriers in a local Kenyan context (Wawire & Nafukho, 2010).In this study, it is against the aforementioned that this research aims to search for answers to the question: What are the barriers to effective job creation in the Jua Kali sub-sector, in Nairobi, Kenya?

Delineating Jua Kali
The term 'informal' is ubiquitous in the entrepreneurship literature, with various studies (Guma, 2015;Safavian et al., 2016) referring to it as enterprises and accompanying activities of production which are unregistered, unregulated and often fall outside the boundaries of a formal tax system.In addition, Henning and Akoob (2017) assert that informal enterprises are run according to other informal arrangements.In Kenya, the term often used is Jua Kali, which in essence implies the informal sector.The Jua Kali sector is made up of a wide-range of entrepreneurial activities, which normally are miniature on operation, have little or no distinction between labor and capital factors (Wilkinson, 2013), low bargaining power and the competition is intense and cut throat.They also have lower start-up costs, normally involve unskilled labor and make use of adapted technologies (Gadzala, 2009).
The Jua Kali sector continues to attract attention worldwide, and it has been referenced in extant literature (Atiase et 2016) argues, the informal sector cannot be disregarded if an all-inclusive development pathway for a country is to be attained.However, despite obvious advantages, enterprises within this sector continue to have low growth rates and limited potential (Micro and Small Enterprises Authority, 2013), often resulting from multifaceted environment among other factors.
The literature attempting to explain entrepreneurship development commenced with the work of Joseph Schumpeter in the early 1990's, whose theory states that creativity is the key factor of economic development, however, creativity must work hand in hand with knowledge for successful entrepreneurship.Schumpeter (1990) believed that creativity was essential if the entrepreneur was to make profits in a highly competitive market.Characteristically, the innovation to succeed then there should be risk taking, motivation and talent, coordination and leadership skills.Although this theoretical perspective is important and applicable to the informal economy, however, it overlooks the significant sources of real savings such as deficit financing, budgetary savings, public borrowings and other fiscal measures, as it presupposes that creativity is backed by bank credit, hence, not much convincing.
The trait perspective (Stogdill, 1948, 1974in Northouse, 2016) postulates that inordinate leaders are born with distinguished personality traits that make them better suited for management and make them different from other people or their followers.Through a survey, the abovementioned was able to develop the most comprehensive list of traits, and highlighted that leadership or management circumstances vary significantly and place different demands on leaders, destroy trait theory, leading to the emergence of situational and behavioral approaches (Northouse, 2016).This theory is, however, criticized in the sense that it does not accept as true that traits change over time and as such it assumes people are the same at all times regardless of behavioral change in different situations.Furthermore, this theory provides little or no guidance in the changing of negative aspects of a trait (Heffner, 2017).
In another strand of theories, business growth is explained by capabilities and resources, which the business owner possesses or can acquire in a sustainable manner (Barney, 1991;Penrose, 1959).This theory points at the long-term competitive advantage and economic success with adequate resource potentials.Businesses tend to develop when they have key resources and drivers of performance and are perceived as valuable.In a nutshell, the theories reveal the importance of innovation, personality traits and resources to sustain entrepreneurship (Barney, 1991).
Enterprises in less developed countries face many more challenges that would curtail their development and performance and there are many unknown barriers to the development of the informal sector.The following sub-section discusses Modarresi et al's (2017) 'framework' in order to determine the likely barriers to effective and efficient development of the Jua Kali sector.

Macro-level barriers
There is overwhelming evidence from earlier studies that points to corruption as the greatest barrier among enterprises in developing countries (Chowdhury, 2005;Kimuyu, 2007;Lavallée & Roubaud, 2018).Evidence from Kenya reveals that enterprises spent significant proportions of their revenue on unofficial and irregular payments for public utilities.For example, a survey by Safavian et al. (2016) established that 53 percent of businesses sampled indicated that they pay bribes in order to stay in business and harassment by government officials was highlighted by 60 percent of the responding businesses.
In Sub-Saharan Africa, Jua Kali businesses' tendency for growth is further limited by access to physical infrastructure and government services (Henning & Akoob, 2017).Some researchers (Atiase et al., 2017;Ouma, 2010;Safavian et al., 2016) have argued that provision of infrastructure (for instance, accessible land/spaces) and access to government services, for instance, cost-effective electricity, would be a major inducement for registration and migration from informality to formality.Another macro barrier to the development of businesses in general is political turmoil.Although Kenya is a relatively stable country, political instability and armed conflict have been suggested to derail economic activities in some African countries (African Development Bank Report, 2017).In Kenya, this has always been an occurrence during electioneering periods and the effects have been devastating (Juma, 2018).There is an evidence to suggest that ethnic stereotypes impact negatively on business.For example, in Kenya, businesses have been seen as a preserve for other communities (Kimuyu, 2007).Such ethnic stereotypes are seen as a significant obstacle for growth, hence, limiting the overall development of informal sector.Such discrimination is often occasioned by political factors, which pose hindrances to entrepreneurial activity, since it lacks the support systems in the social context.
Good governance has been suggested as a key variable for entrepreneurship development in Africa (Meghana et al., 2014;Shibia & Barako, 2017), and the relationship between governance and entrepreneurial development was found to be positive and significant (Atiase et al., 2017) in that a unit increase in good governance in Africa would lead to more than three (3) percent growth in entrepreneurship, since entrepreneurs are able to fully exploit opportunities without restriction leading to informal sector growth.It is implied here that good corporate governance and management of the economy translate into general positive outcomes for business and its sustainability.Furthermore, a new emerging challenge in African countries impacting local enterprise growth in the informal sector is the presence of Chinese enterprises in these countries.According to Gadzala (2009), Chinese business presence in Kenya results in low-cost products being produced by small scale industries in China and imported to Kenya, which creates greater competition, since the local enterprises cannot compete (on price) due to the costs associated with their production outputs.

Industry-related barriers
Jua Kali entrepreneurs in Kenya face a clear and severe bias in accessing bank credit, with real lending rates remaining between 12 percent and 18 percent or higher (Juma, 2017).According to researchers (Gadzala, 2009;Sambo, 2016;Wawire & Nafukho, 2010), specific finance problems related to informal entrepreneurship include: lack of credit history, high transaction costs, lack of collateral, stringent bank conditions, which render them unqualified, insufficient business and management experience as well as inability to assess and manage their risk profile.Entrepreneurs also dread to borrow, in particular, taking responsibility for money that does not belong to them (Ama, Mangadi, & Ama, 2014), which leaves them with the only option of acquiring funds from mainly informal sources or non-banking agencies, which funds are linked to harsh very stringent conditions and terms.Therefore, there is a funding gap, which prevents informal entrepreneurs from attaining the highest level of business realization.
Lack of information has also been a major barrier, and generally speaking, information and, in particular, credit information should be widely available.As Henning and Akoob (2017) sug-gest, governments should restructure its service centres to enable this information to be readily available and accessible.For example, the government institutions in Kenya such as the Youth and Women Enterprise Development Funds and associated Centres could enable access to information and advising, since such support services, including consultation and guidance, have a strong impact on enterprise growth (Atiase, 2017;World Bank, 2017).
With regards to the availability of raw materials, a study by Bull et al. (2016) on the informal metal working sector in Nairobi reveals that a lack of sources for materials to inspire innovation, as well as lack of incentives to innovate, were key obstacles to innovation among Jua Kali artisans.Intellectual property theft was also cited as a disincentive to innovate.This result elucidates a lack of help offered to such entrepreneurs in generating the innovations.

Micro-level barriers
Although personality, demographic characteristics and personal attitudes, business experience and skills are arguably some of the most crucial traits needed for successful entrepreneurship initiatives, these have been found to be challenges impacting entrepreneurship development (Nxumalo & Kaseeram, 2017;Modarresi, 2017).Huang, Nandialath, Alsayaghi, and Karadeniz (2013) ascertained a strong interplay between socio-demographic variables namely age, gender, education and income and their impact on usage of advice-seeking networks by entrepreneurs.A recent study by Clegg (2018), among a sample of UK SME owner-managers on their perceptions of growth-impeding constraints, revealed that inadequate abilities, lack of development expertise in product and service innovations and a lack of skill in information technology were the common limits to growth.Mbithi (2015) conducted a study among women entrepreneurs in the Kenya's informal sector and 3 This is a commercial Jua Kali niche in Kenya's capital Nairobi -outside the boundaries of the Nairobi Central Business District, and features an active commercial market, which caters for low and middle income consumers in Nairobi, as well as outside the city.It is largely occupied by very small scale businesses.
Other than makers and business owners, the cluster includes association officers, input suppliers, trainees and agents who bring together producers and buyers (Bull et al., 2016).
found that confidence and low levels of education hindered their entrepreneurship growth.Whilst there are many studies showing constraints to entrepreneurship, these results are difficult to generalize and or lack relevance to the Kenyan context; thus, the need for the current study to with specific reference to the Jua Kali sector.Thus, this study was conducted among a sample in the Kenyan Kamukunji 3 market place.

RESEARCH METHODOLOGY
To understand the barriers to effective job creation in the Jua Kali sub-sector, the researchers were concerned with what constitutes reality and how to generate knowledge about the reality in the field.Objectivism and positivism research philosophies guided this study (Creswell, 2014; Lincoln, Lynham, & Guba, 2011), since the entrepreneurs were 'out there' whose responses could be quantified.A descriptive survey design was used, which facilitated the collection of discrete numerical data using a standardized questionnaire.

Sample selection
The target population comprised all entrepreneurs in the Kamukunji Jua Kali group to ensure adequate representation of all segments of production and trading.However, only those listed and registered in the association's (Kamukunji Jua Kali Association, KJKA) directory at the end of 2017 were targeted.Stratified random sampling was used to limit selection bias (Saunders, Lewis, Thornhill, & Guppa, 2007) and then systematic sampling was used where one out five entrepreneurs in a list of 600 traders (KJKA, 2017), was selected.This process assisted in selecting 118 respondents from the following groups in line with what they manufactured or traded in, namely: building supplies, kitchenware, products used in farms and or for agricultural purposes, storage and other domestic products.

Data collection
Data were collected through standardized questionnaires completed by respondents.The questionnaire comprised mainly five-point Likert scale questions ranging from strongly disagree (1) to strongly agree (5).The questions were subsequently broken down into five measures: education and skills, and traits (10) items each, experience (7), access to finance (8), job creation (10), which form the basis of the investigation results.Experts in the area of study were consulted to check on the questionnaire items' efficacy, thus ensuring content and face validity.The internal consistency method for reliability as estimated by Cronbach Alpha (Leedy & Ormrod, 2013;Warrens, 2015) was used to measure reliability of the question-naire.This technique helped to ensure that during data analysis stage and particularly when performing factor analysis, the items would meet at least the 70% reliability threshold as advocated by Hair, Black, Babin, and Anderson (2010).
Prior to real field work, all necessary authorizations were sought from the "gate keepers".Adequate information was provided to the participants by the researchers during the survey to encourage voluntary participation, and all participants were assured of their confidentiality and no one was compelled to participate (Leedy & Ormrod, 2013).The questionnaires were left with the participants for completion at their convenience and collected at an agreed date and time.At the time of collection, the researchers were able to clarify the issues, which prevented the respondents from completing the questionnaire.

Data analysis
Descriptive analysis was conducted at the initial stages of the statistical analysis in order to identify patterns on then characteristics of the sample.This was the followed by Exploratory Factor Analysis (EFA) (

Descriptive information of the sample
According to Table 1, the majority of respondents were males (57.6%); about 34.8% were aged between 36 and 45 years; the vast majority (39.8%) had secondary education, while 36.4% had a college certificate.With regard to the marital status of the entrepreneurs, 31.6% were married.Only 38.9% had between 3 and 5 years of experience in business and the majority (35.6%) dealt with domestic wares.

Scale reliability and validity
All the scale items fitted into their respective factor and the standardized factor loadings were reasonably above the cut-off of 0.5, as suggested by Hair et al. (2010).Cronbach Alpha values for all factors were in excess of 0.7, which is above the cut-off point and indicating scale reliability.Eigen values were also greater than 1 (see Table 2).
From Table 2, it is evident that business experience emerged as the most important factor by explaining approximately 43.6% of the variance, followed by access to finance, which explained 25.6% of the variance among factors.Personality traits was third factor explaining 20.8% of variance, while skills were followed by education, which explained 19.9% of the variance.Based on these outcomes, we came up with the conceptual model as illustrated in Figure 1.

Estimation of regression coefficients on the job creation variables
In order to estimate the association between the variables established to impact on job creation, multiple linear regression analysis was performed, the results are reflected in Tables 3 and 4.
Table 3 shows that business experience is the only variable that significantly affects the job creation.It is confirmed from the analysis (t = 4.97; p < 0.01) that experience in business is the only significant variable among the four variables that were studied.The p-value for the coefficient of traits is insignificant (t = -0.180),indicating that traits do not positively affect job creation through entre-  preneurship.These results therefore imply that the personality traits of entrepreneurs in Kenya's Jua Kali sector influences (though not significantly) job creation via entrepreneurship.
On the other hand, age was found to be positive and significant, in particular, age between 36 and 45 years (t = 5.74; p < 0.01) and between 45 and 55 years (t = 2.78; p < 0.01), which confirms that age positively influences successful job creation.Education also positively influences success in job creation and, in particular, post primary education, as evidenced by secondary (t = -2.80;p < 0.01) and college level (t = -2.16;p < 0.05).The p-value for the coefficients of marital status shows significant results (p < 0.01), which implies that those entrepreneurs who are either single (t = 3.28) or widowed (7.31) are highly likely to create jobs in the Kenyan Jua Kali industry.Lastly, regression results also showed that on-the-job experience is positive and significant (t = 3.68; p < 0.01), which indicates that experience affects job creation.

Entrepreneurs' profiles and job creation
The association between the entrepreneurs' profiles and job creation was analyzed using Kruskal-Wallis test, where job creation was the endogenous variables, while sample demographic characteristics were the exogenous variables.Table 5 shows that there is a variance (significant differences) for education and marital status, implying that these variables play a greater role on the success of entrepreneurship and by extension, to job creation.Notes: significant at * p < 0.05; ** p < 0.01 percent levels.

DISCUSSION
In order to determine which barriers needed to be managed in order to improve the sector in Kenya, factor loadings were used.In Table 2, the estimated factor loadings were above 0.9 for each theme/ factor, thus assuring the uni-dimensionality of the items of each barrier (Field, 2009).The ensuing factors were further subjected to regression analysis to identify those that significantly impacted job creation in the industry.The results show that experience in business is the most important aspect to job creation.

CONCLUSION
The aim of this paper was to investigate barriers to job creation in the Jua Kali sector in Kenya through a multi-theoretical approach, which helped develop a conceptual framework for identifying the barriers.This framework assisted in developing the study by highlighting the barriers to job creation, which were macro, industry and micro related.Overall, we find strong evidence to conclude that business experience and personality traits are the most important barriers to job creation in the Jua Kali sector.Socio-demographic differences could impact involvement in entrepreneurial activities.Business access to finance was also a barrier to the informal sector, which reflects the significant role of financial support in the Jua Kali sector.This study adds to the growing body of knowledge in the small business management domain through isolation of barriers in the informal sector, enabling managers and policy makers to manipulate them in order to improve the Jua Kali sector.

RECOMMENDATIONS
Reducing informal sector barriers would improve the Jua Kali success in Kenya.The following recommendations could help deal with the most potent barriers that emerged from this study.
• Having business centers to advise, consult and train entrepreneurs to increase their confidence in their business would help strengthen some traits, as well as business prowess among entrepreneurs.
• In relation to the aforementioned, policy makers could enhance specific plans and programs when introducing and promoting the Jua Kali sector opportunities through different media.
• There should be a community dialogue welcomed by all in the community, because communities that support entrepreneurship and innovation encourage self-employment to develop more rapidly.This is yet to reach the optimum despite high unemployment rates, particularly among the ever-increasing educated population.
• Although Kenya has made some progress to make available access to financing to everybody, particularly through mobile money services in the form of loans, this is yet to cover a wider population.
To achieve growth and job creation among Jua Kali enterprises, there is a need to ensure that appropriate and well suited financing options are made accessible to the Jua Kali sector.Government/s must endeavor to develop enabling policy frameworks that would encourage financial providers to develop appropriate products that meet the needs of the entrepreneurs in the Jua Kali industry.
• Corruption has retrogressive consequences, therefore, government policy makers should rationalize all rules and legal issues as pertains the informal sector, to help mitigate corruption, as it is a big challenge within the informal sector.They need to provide licenses to operate or fees chargeable to do business and enforce such policy directives in a systematic manner that would not jeopardize businesses, as well as county's revenue targets.

LIMITATION AND SUGGESTION FOR FURTHER RESEARCH
This study was limited to a specific industry and sample in the capital city of Nairobi, Kenya.However, barriers to Jua Kali enterprise development could be also influenced by the operational environments, which vary from county to county.Therefore, a barrier in one county may not necessarily be a barrier in another county due to social and geographical differences.Conducting cross-county, cross-cultural or cross-country investigation seems indispensable to better appreciate and explain informal sector businesses and, hence, create a basis for the extension of generalizable theory and related findings.In addition, the link between the variables could further be explored through use of thorough methodical analyses such as Structural Equation Modelling and larger sample sizes to help elucidate the pattern of associations.This could be extended in understanding such associations in different geographical locations, for example, counties, countries and cultures.Studying differences among the barriers to job creation in women-led and men-led businesses is another suggested area.Another limitation is related to the instrument -the questionnaire, which simply generalized the findings, paid no attention to indepth insights that could be found by use of other data gathering methods.As such, we recommend the use of mixed techniques or approaches to data collection in future studies to supplement the findings.For example, the use of panel data, other publications and reports from the government and research organizations could help refine the barriers.

Table 1 .
The demographic characteristics of the study sample Source: Research findings (2018).

Table 2 .
Exploratory factor analysis and reliability results

Table 4 .
Influence of variables

Table 5 .
Kruskal-Wallis equality of population rank test