MASTERS IN DEVELOPMENT STUDIES MDS

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    VALUE-ADDED PROGRAMMES AND PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN KENYA: A CASE STUDY OF INCUBATED SMALL AND MEDIUM ENTERPRISES IN KISUMU CITY
    (MUA, 2025-10) DANIEL LEMAYIAN KITIYIA
    This study examined the effect of value-added programmes on performance of SMEs within Kisumu City 's incubation programme. Specifically, the research aimed to assess the effect of innovation on performance of small and medium enterprises under the incubation programme, to evaluate the effect of capacity building on performance of small and medium enterprises within the incubation programme; to assess the effect of marketing support programme on SME performance; to evaluate the effect of networking on SME performance. It was grounded in the Social Exchange Theory, the Dynamic Capabilities Theory, and Porter’s Value Chain framework. A descriptive survey approach was adopted, targeting owners of 2,844 participants this include (2800 business owners in Kisumu involved in the incubation programme, as well as 44 staff members from regional enterprise support organisations). A sample of 323 respondents including (SMEs and field officers) were selected using the Miller and Brewer (2021) sample size formula. Data collection primarily involved a structured questionnaire, and a pilot study was conducted to assess the accuracy and validity of the instruments. Data analysis was performed using the Statistical Package for the Social Sciences (SPSS), version 26, and Microsoft Excel. Measures of dispersion such as percentages, frequencies, means, and standard deviations were employed. Inferential statistical techniques, including regression analysis, analysis of variance (ANOVA), and Pearson’s correlation, were used to determine the relationships between variables. The results indicated that most participants regarded innovation as a key driver of value addition, which subsequently affected SME performance. Capacity building was also identified as a means of supporting SMEs by equipping them with essential knowledge and skills. Additionally, marketing support and networking were recognised as significant contributors to the success of SMEs within the incubation programme. Further analysis demonstrated a statistically significant relationship between value-added programme and SME performance (r = 0.745, p < 0.05). It was also observed that a one-unit change in the independent variables resulted in a 55% change in SME performance, with 55.5% (R² = 0.555) of the variance explained. Regarding the model’s predictive capacity, the ANOVA test yielded an F-statistic (F = 65.634; p < 0.05), confirming that the model strongly indicated a correlation between value addition and SME performance. The study concluded that incubation programmes aimed at enhancing value addition among SMEs were crucial for improving their performance.