they unfortunately approach the finance angle in a jua kali way .
For example , most of the failed ( 1.2M according to KNBS ) being rural , are at the mercy of their rural kinsmen , their allegiance to close-knit communities plaque , close friends , relatives and acquaintances who tend to borrow from them money , either take goods on credit , convince them to deviate funds to other non business related activities like harambees , and on some occassions , many of the village entrepreneur will be enticed to involving self with multiple start ups instead of consolidating and concentrating his resources in succeeding on a single one .
In addition unfortunately , in the recent past and indeed in some localities , the former provincial administration remnants of chiefs and their cohorts still extort gullible and ignorant entrepreneurs .
To curb this financing menace some policies were introduced like ‘ The Public Finance Management ( Amendment ) Bill , 2012 . An initiative was introduced in Parliament to amend the Public Finance Management Act to make specific provision for the national government public funds and established , for the benefit of the youth , women or other vulnerable or marginalized and thus emerged The Youth Enterprise Fund and Women Enterprise Fund which were mooted and entrenched to help cater for the gap in funding the marginalized .
In addition too NAFIIS was launched by the Minister of Finance on 14th March 2011 . The purpose of the Fund is to provide loans to medium , small and micro enterprises . The government appropriated a sum of KShs . 3.8 billion to establish this revolving fund . The entrepreneur can sue for funds set aside under this program .
In short , the entrepreneurs who are short of funding have now an avenue to approach the banks with confidence that a bank loan will not be too exorbitant as has been in the past . They can also approach the facilities set aside by the government like for the youth , women , and the disadvantaged to inject needed resources in their enterprises .
Regulatory Authorities
Businesses fail when authorities fail to deliver on their obligations , services and infrastructure provisioning . To quote a real example , as recorded in Kenya Law reports Petition No . 14 Of 2016 in the case of Eastleigh Business District Association vs Nairobi City County , In its Affidavit in support , the Applicant ’ s case is that the Respondent ordinarily issues to them business permits and licenses annually to allow them and others to conduct business and trade within Eastleigh area .
That inspite of the Respondent collecting rates , imposing fees and other charges from them , it has failed and or neglected to regulate and manage inter alia public nuisance , environmental pollution , public road transport , trade development practices , county planning and development policies , refuse removal and solid waste disposal and sanitation management services within that area .
The businessmen cite that the inaction or abetting of the city council is leading to unfair competition and health and other hazards . If this would continue they would be out of business .
The judgement cited Section 103 of the Public Finance Management Act , No 18 of 2012 , with specific regard to Section 104 proving that the devolved governments do have a duty to the wellbeing of entrepreneurs in their backyards . The entrepreneurs who are being short changed can now cite their rights as enshrined in the constitution whether with the county governments or national governments to demand their rights . They can put their money in an escrow account together with county governments to be released as services are delivered .
Ignorance
Many start businesses because they have good ideas but have no clue on how to establish and run commercially viable enterprises and within no time the businessmen run out of ideas and close shop . According to Nyanducha ( 2006 ) on Managing Success , it has often been noted that the entrepreneur with the ability of founding businesses often turns out to be very poor at managing success .
The Government now through acts is set to establish universities and other public tertiary institutions are encumbered to make entrepreneurship courses available . The entrepreneur who is thus feeling challenged or who identifies his shortfalls can now walk into a government sponsored program as facilitated by law and seek to up his skills .
Insecurity
There are extortion gangs that have emerged seeking protection fees thus further depleting the revenue streams and confidence of the entrepreneur . Recently , the Government named some 40 or so outfits and the best known example is the Mungiki menace in Central Kenya . Extremist terrorist groups in some parts of the country have also rendered some enterprises moribund like in Mandera as the client base will prefer to save skin and keep away like in the case of soft targets like food kiosks , hotels and residences .
The Law however guarantees security for example Petition No . 132 Of 2011 the petitioners vs AG , IGP , Internal security , claims that the failure of security apparatus to protect her property from wanton destruction and burning by illegal gangs violated her right to property as enshrined under Article 40 of the Constitution . The