SEED CAPITAL, ENTREPRENEURIAL EXPERIENCE AND PERFORMANCE OF JUA KALI ENTERPRISES IN KAMUKUNJI, KENYA
Abstract
Purpose of the Study: This study examined the effect of seed capital on the performance of Jua Kali enterprises in Kamukunji, Nairobi City County, Kenya.
Statement of the Problem: Jua Kali enterprises play a vital role in employment and economic growth in emerging economies. However, insufficient seed capital continues to constrain their productivity and growth potential.
Methodology: Anchored on the Resource-Based View Theory, Pecking Order Theory, and Entrepreneurial Value Creation Theory, the study adopted descriptive and explanatory research designs. The target population comprised 4,763 Jua Kali enterprises in Kamukunji, with owners/managers as the unit of analysis. A sample of 367 respondents was selected using stratified proportionate sampling and simple random sampling. Data were analysed using both descriptive and inferential statistics, including multiple linear regression and Baron and Kenny’s (1986) mediation procedure.
Findings: The results revealed a significant positive relationship between seed capital and firm performance. Entrepreneurial experience partially mediated this relationship, indicating that while seed capital directly enhances performance, its effect is substantially strengthened when entrepreneurs possess high levels of experiential knowledge, financial competence, and strategic capabilities.
Conclusion and Recommendations: Entrepreneurial experience acts as a critical internal asset that amplifies the productive use of seed capital. Entrepreneurs should invest in developing management skills, financial literacy, and strategic abilities. Policymakers and financial institutions are advised to design integrated programmes that combine capital access with entrepreneurial capacity-building to unlock the growth potential of informal businesses.
Keywords: Seed Capital, Entrepreneurial Experience, Performance, Jua Kali Enterprises, Kamukunji, Kenya
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