IPAID

Institute for Poverty Alleviation and
International Development

Yonsei University

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Volume 6 Number 2 December 2015
Small Businesses in Kenya: Transition from Informal to Formal Enterprises
Author_ Jacob C. NG’ANG’A & Anne GITONGA
Pages 167-189
Abstract_ The Kenyan economy is broadly characterized by two parallel sectors: the formal comprised of registered businesses and the informal defined by the economic activities of non-registered businesses. Despite the several advantages of registering a business, only a minority of businesses in Kenya are registered. This paper addresses the question of why a large number of small businesses in Kenya opt to operate informally. The findings show that firm age, size of business, owner’s experience, business sector, gender of owner and type of business premise influence the choice to register a business. The paper recommends that the government simplify registration and link it to licensing, decentralize and automate registration, and enforce registration without directly linking it to tax obligations.
Keywords_ Small businesses, Registration, Informal sector
 
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IPAID

Institute for Poverty Alleviation and International Development (IPAID) at Yonsei University

1, Yonseidae-gil, Wonju-si, Gangwon-do, South Korea

강원도 원주시 연세대길1 연세대학교 원주캠퍼스 정의관 316호 빈곤문제국제개발연구원

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