Business Development Services and Government Regulations: Prospects and Challenges of Youth-Owned Enterprises in Kigali Rwanda
DOI:
https://doi.org/10.47742/ijbssr.v4n3p2
Keywords:
Resources-Based View Theory, Theory of Stage of Development, Schumpeter’s Theory of Innovation, Networking Services, Training Services, Financial Services, Marketing Services, Government RegulationsAbstract
Small and medium-sized businesses are crucial for creating jobs and reducing poverty, and Rwanda's economic growth. Business development services as a central component of government and non-government initiatives to expand occupation, provide greater income, and give economic stability. However, small and medium enterprises in Rwanda are experiencing poor performance since there was a reduction in SMEs Output from 58% in 2020 to 30% in 2021. Those obstacles can be improved by adopting business development services as an approach. Therefore, the focus of this paper was to examine how business development services affect the performance of youth-owned small and medium enterprises in Kigali City, Rwanda. The Resource-Based View, the Theory of Stage of Development, and Schumpeter’s Theory of Innovation were the main theories. This study used positivism as a research philosophy. An explanatory research design was employed on a sample size of 154 small and medium enterprises selected from the target population of 256 small and medium enterprises in Kigali, Rwanda. The study recommends policy and practice ramifications that can be used to improve business development services on the performance of youth-owned businesses in Rwanda. The study recommends the management of youth-owned enterprises strengthen their networking services, financial services, training services, and marketing services so that small and medium enterprises will be able to learn more and gain vital business potential which will enable them to better manage their businesses and enhance their long-term profitability and performance. Furthermore, the findings also established that government regulations in Rwanda significantly moderate the relationship between business development services and the performance of the business in Kigali city. In particular, the government should review taxes charged by the running of the enterprise and the process of obtaining a license to participate in the business. This will make it possible for young business owners to understand and take advantage of numerous business development services, which will ultimately improve their business performance.
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References
Abor, J., & Quartey, P. (2010). Issues in SME development in Ghana and South Africa. International Research Journal of Finance and Economics, 39(February), 218–228.
Amha, W., & Ageba, G. (2006). Business development services (BDS) in Ethiopia: Status, prospects and challenges in the micro and small enterprise sector. International Journal of Emerging Markets, 1(4), 305–328. https://doi.org/10.1108/17468800610703360
Asomaning, R., & Abdulai, A. (2015). An Empirical Evidence of the Market Orientation – Market Performance Relationship in Ghanaian Small Businesses. Educational Research International, 4(April), 69–86.
Aterido, R., Hallward-Driemeier, M., & Pages, C. (2012). Investment Climate and Employment Growth: The Impact of Access to Finance, Corruption and Regulations Across Firms. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1820915
Bernatzki, T., Busse, M., & Hoekstra, R. (2022a). Promoting Rwanda’s business environment: Impact of reforms and drivers of change. In Development Policy Review (Vol. 40, Issue 2). https://doi.org/10.1111/dpr.12578
Bernatzki, T., Busse, M., & Hoekstra, R. (2022b). Promoting Rwanda’s business environment: Impact of reforms and drivers of change. Development Policy Review, 40(2), 1–17. https://doi.org/10.1111/dpr.12578
Brush, C. G., de Bruin, A., & Welter, F. (2009). A gender-aware framework for women’s entrepreneurship. International Journal of Gender and Entrepreneurship, 1(1), 8–24. https://doi.org/10.1108/17566260910942318
Cardoza, G., Fornes, G., Li, P., Xu, N., & Xu, S. (2015). China goes global: public policies’ influence on small- and medium-sized enterprises’ international expansion. Asia Pacific Business Review, 21(2), 188–210. https://doi.org/10.1080/13602381.2013.876183
Connor, T. (2002). The resource-based view of strategy and its value to practising managers. Strategic Change, 11(6), 307–316. https://doi.org/10.1002/jsc.593
Djankov, S., McLiesh, C., & Ramalho, R. M. (2006). Regulation and growth. Economics Letters, 92(3), 395–401. https://doi.org/10.1016/j.econlet.2006.03.021
Dunford, B. B., Snell, S. A., & Wright, P. M. (2001). W ORKING P APER S ERIES Human Resources and the Resource Based View of the Firm and the Resource Based View of the Firm. Journal of Management, 1–35.
Dushime, E., Muathe, S., & Kavindah, L. (2021). The Interplay of Entrepreneurial Innovation, Government Regulation and Performance: any Lessons for The SMEs. A Theoretical Review. European Scientific Journal ESJ, 17(12). https://doi.org/10.19044/esj.2021.v17n12p235
Elfring, T., & Hulsink, W. (2003). Networks in Entrepreneurship: The Case of High-technology Firms. Small Business Economics, 21(4), 409–422. https://doi.org/10.1023/A:1026180418357 Enock, T. (2016). Micro and Small Enterprises: a Case of Mutarakwa.
Eraut, M. (2004). Informal learning in the workplace. Studies in Continuing Education, 26(2), 247–273. https://doi.org/10.1080/158037042000225245
Fatoki, O. O. (2011). The Impact of Human, Social and Financial Capital on the Performance of Small and Medium-Sized Enterprises (SMEs) in South Africa. Journal of Social Sciences, 29(3), 193–204. https://doi.org/10.1080/09718923.2011.11892970
Galbreath, J. T. (2004). Determinants of Firm Success: A Resource-Based Analysis. Differences, December. https://espace.curtin.edu.au/bitstream/handle/20.500.11937/2311/15533_GalbreathPhDelec.pdf?sequence=2
Greer, C. R., Youngblood, S. A., & Gray, D. A. (1999). Human resource management outsourcing: The make or buy decision. Academy of Management Executive, 13(3), 85–96. https://doi.org/10.5465/ame.1999.2210317
Hagabirema, K., & Kungu, G. K. (2020). Business Support Services and Performance of Small Medium Enterprises in Rwanda: Case of BDF Supported SMEs in Gicumbi District. International Journal of Scientific and Research Publications (IJSRP), 10(4), p10085. https://doi.org/10.29322/ijsrp.10.04.2020.p10085
Hynes, B. (1996). Entrepreneurship education and training - introducing entrepreneurship into non-business disciplines. Journal of European Industrial Training, 20(8), 10–17. https://doi.org/10.1108/03090599610128836
Kayne, J. A. (2011). State Entrepreneurship Policies and Programs. SSRN Electronic Journal, November. https://doi.org/10.2139/ssrn.1260444
Khattak, M. S., Anwar, M., & Clauß, T. (2021). The Role of Entrepreneurial Finance in Corporate Social Responsibility and New Venture Performance in an Emerging Market. Journal of Entrepreneurship, 30(2), 336–366. https://doi.org/10.1177/09713557211025655
Kimando, L. N., Sakwa, M., Grace, M., & Njogu, W. (2012). Impact of Business Development Services on Enterprises in Rural Kenya: A Case Study of Micro and Small Enterprises in Muranga Town. International Journal of Business and Commerce, 1(9). www.ijbcnet.com
Kirzner, I. M. (1999). Creativity and/or alertness: A reconsideration of the schumpeterian entrepreneur. Review of Austrian Economics, 11(1–2), 5–17. https://doi.org/10.1023/a:1007719905868
Languilaire, J.-C. E. (2017). Businesses in Rwanda Sustainable Entrepreneurship, Marketing and Management for Sustainability. In International Business School JIBS Research Reports. www.ju.se
Lee, M. D. P. (2008). A review of the theories of corporate social responsibility: Its evolutionary path and the road ahead. International Journal of Management Reviews, 10(1), 53–73. https://doi.org/10.1111/j.1468-2370.2007.00226.x
Maros, H., & Juniar, S. (2016). Micro-credit Access and Growth of youth owned Micro and small retail enterprise in tharaka constituency, Kenya.
Mengstie, B. (2016). Impact of Business Development Services on Performance of Micro and Small Enterprises in East Amhara Region of Ethiopia. In European Journal of Business and Management www.iiste.org ISSN (Vol. 8, Issue 4). Online. www.iiste.org
Muathe, S.M.A. (2010). The Determinants of Adoption of Information and Communication Technology by Small and Medium Enterprises within the Health Sector in Nairobi, Kenya. Unpublished PhD Thesis, Kenyatta University
Muda, S., & Rahman, M. R. C. A. (2016). Human Capital in SMEs Life Cycle Perspective. Procedia Economics and Finance, 35(October 2015), 683–689. https://doi.org/10.1016/s2212-5671(16)00084-8
Muijs, D., West, M., & Ainscow, M. (2010). Why network? Theoretical perspectives on networking. School Effectiveness and School Improvement, 21(1), 5–26. https://doi.org/10.1080/09243450903569692
Muller, E. L., & Amit. (2000). 21. Theory Dev in Entrepeneurship.
Mwaniki, Z., Ngugi, P., & Nyang’au, S. (2022). Relationship Between Business Development Services and Growth of Small and Medium Enterprises in Kenya. European Journal of Business and Strategic Management, 7(1), 1–14. https://doi.org/10.47604/ejbsm.1480
Njawa, J. J. (2015). The effects of Advertising on Organizational Performance: A Case Study of Tigo Telecommunication Network. 80. http://scholar.mzumbe.ac.tz/bitstream/handle/11192/1062/MBA_Junior John Njawa_2015.pdf?sequence=1
Nyadida, R. A., & Otuya, W. N. (2021). C.(2021). Effects of business support services on performance of women owned small and micro enterprises in Mathare slums, Nairobi County. … Journal of Economics and Finance, 3 (7) …, 3(7). http://www.iajournals.org/articles/iajef_v3_i7_239_263.pdf
Ogunnaike, O., & Kehinde, O. (2013). Social networking and business performance: The case of selected entrepreneurs in Ota, Nigeria. Journal of Business Administration and Management Sciences Research, 2(5), 116–122.
Okyere, N. Y. D., Agyapong, G. K. ., & Nyarku, K. M. (2011). The Effect of Marketing Communications on the Sales Performance of Ghana Telecom (Vodafone, Ghana). International Journal of Marketing Studies, 3(4). https://doi.org/10.5539/ijms.v3n4p50
Ombi, N., Ambad, S. N. A., & Bujang, I. (2018a). The Effect of Business Development Services on Small Medium Enterprises (SMEs) Performance. International Journal of Academic Research in Business and Social Sciences, 8(3). https://doi.org/10.6007/ijarbss/v8-i3/3910
Ombi, N., Ambad, S. N. A., & Bujang, I. (2018b). The Effect of Business Development Services on Small Medium Enterprises (SMEs) Performance. International Journal of Academic Research in Business and Social Sciences, 8(3). https://doi.org/10.6007/ijarbss/v8-i3/3910
Parameth, C. (2017). Introduction to business development services.
Patel, J. D., Gadhavi, D. D., & Shukla, Y. S. (2017). Consumers’ responses to cause related marketing: moderating influence of cause involvement and skepticism on attitude and purchase intention. International Review on Public and Nonprofit Marketing, 14(1), 1–18. https://doi.org/10.1007/s12208-016-0151-1
Peter, F. O., Adegbuyi, O., Olokundun, M. A., Peter, A. O., Amaihian, A. B., & Ibidunni, S. A. (2018). Government financial support and financial performance of SMEs. Academy of Strategic Management Journal, 17(3), 1–10.
Ruzekova, V., Kittova, Z., & Steinhauser, D. (2020). Export performance as a measurement of competitiveness. Journal of Competitiveness, 12(1), 145–160. https://doi.org/10.7441/joc.2020.01.09
Rwanda Ministry of Trade and Industry. (2020). Wranda Entrepreneurship Development Policy. April, 1–60. https://www.minicom.gov.rw/fileadmin/user_upload/Minicom/Publications/Policies/Entrepreneurship_Development_Policy_-_EDP.pdf
Rwanda, U. N. (2014). Youth and Women Employment Government of Rwanda and One United Nations - Rwanda. 1–78.
Tang, Y. K. (2011). The influence of networking on the internationalization of SMEs: Evidence from internationalized Chinese firms. International Small Business Journal, 29(4), 374–398. https://doi.org/10.1177/0266242610369748
Uwitonze, M. (2016). Small and medium enterprises and job creation in Rwanda. http://dr.ur.ac.rw/bitstream/handle/123456789/84/UWITONZE Marc.pdf?sequence=1&isAllowed=y
Abor, J., & Quartey, P. (2010). Issues in SME development in Ghana and South Africa. International Research Journal of Finance and Economics, 39(February), 218–228.
Amha, W., & Ageba, G. (2006). Business development services (BDS) in Ethiopia: Status, prospects and challenges in the micro and small enterprise sector. International Journal of Emerging Markets, 1(4), 305–328. https://doi.org/10.1108/17468800610703360
Asomaning, R., & Abdulai, A. (2015). An Empirical Evidence of the Market Orientation – Market Performance Relationship in Ghanaian Small Businesses. Educational Research International, 4(April), 69–86.
Aterido, R., Hallward-Driemeier, M., & Pages, C. (2012). Investment Climate and Employment Growth: The Impact of Access to Finance, Corruption and Regulations Across Firms. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1820915
Bernatzki, T., Busse, M., & Hoekstra, R. (2022a). Promoting Rwanda’s business environment: Impact of reforms and drivers of change. In Development Policy Review (Vol. 40, Issue 2). https://doi.org/10.1111/dpr.12578
Bernatzki, T., Busse, M., & Hoekstra, R. (2022b). Promoting Rwanda’s business environment: Impact of reforms and drivers of change. Development Policy Review, 40(2), 1–17. https://doi.org/10.1111/dpr.12578
Brush, C. G., de Bruin, A., & Welter, F. (2009). A gender-aware framework for women’s entrepreneurship. International Journal of Gender and Entrepreneurship, 1(1), 8–24. https://doi.org/10.1108/17566260910942318
Cardoza, G., Fornes, G., Li, P., Xu, N., & Xu, S. (2015). China goes global: public policies’ influence on small- and medium-sized enterprises’ international expansion. Asia Pacific Business Review, 21(2), 188–210. https://doi.org/10.1080/13602381.2013.876183
Connor, T. (2002). The resource-based view of strategy and its value to practising managers. Strategic Change, 11(6), 307–316. https://doi.org/10.1002/jsc.593
Djankov, S., McLiesh, C., & Ramalho, R. M. (2006). Regulation and growth. Economics Letters, 92(3), 395–401. https://doi.org/10.1016/j.econlet.2006.03.021
Dunford, B. B., Snell, S. A., & Wright, P. M. (2001). W ORKING P APER S ERIES Human Resources and the Resource Based View of the Firm and the Resource Based View of the Firm. Journal of Management, 1–35.
Dushime, E., Muathe, S., & Kavindah, L. (2021). The Interplay of Entrepreneurial Innovation, Government Regulation and Performance: any Lessons for The SMEs. A Theoretical Review. European Scientific Journal ESJ, 17(12). https://doi.org/10.19044/esj.2021.v17n12p235
Elfring, T., & Hulsink, W. (2003). Networks in Entrepreneurship: The Case of High-technology Firms. Small Business Economics, 21(4), 409–422. https://doi.org/10.1023/A:1026180418357
Enock, T. (2016). Micro and Small Enterprises: a Case of Mutarakwa.
Eraut, M. (2004). Informal learning in the workplace. Studies in Continuing Education, 26(2), 247–273. https://doi.org/10.1080/158037042000225245
Fatoki, O. O. (2011). The Impact of Human, Social and Financial Capital on the Performance of Small and Medium-Sized Enterprises (SMEs) in South Africa. Journal of Social Sciences, 29(3), 193–204. https://doi.org/10.1080/09718923.2011.11892970
Galbreath, J. T. (2004). Determinants of Firm Success: A Resource-Based Analysis. Differences, December. https://espace.curtin.edu.au/bitstream/handle/20.500.11937/2311/15533_GalbreathPhDelec.pdf?sequence=2
Greer, C. R., Youngblood, S. A., & Gray, D. A. (1999). Human resource management outsourcing: The make or buy decision. Academy of Management Executive, 13(3), 85–96. https://doi.org/10.5465/ame.1999.2210317
Hagabirema, K., & Kungu, G. K. (2020). Business Support Services and Performance of Small Medium Enterprises in Rwanda: Case of BDF Supported SMEs in Gicumbi District. International Journal of Scientific and Research Publications (IJSRP), 10(4), p10085. https://doi.org/10.29322/ijsrp.10.04.2020.p10085
Hynes, B. (1996). Entrepreneurship education and training - introducing entrepreneurship into non-business disciplines. Journal of European Industrial Training, 20(8), 10–17. https://doi.org/10.1108/03090599610128836
Kayne, J. A. (2011). State Entrepreneurship Policies and Programs. SSRN Electronic Journal, November. https://doi.org/10.2139/ssrn.1260444
Khattak, M. S., Anwar, M., & Clauß, T. (2021). The Role of Entrepreneurial Finance in Corporate Social Responsibility and New Venture Performance in an Emerging Market. Journal of Entrepreneurship, 30(2), 336–366. https://doi.org/10.1177/09713557211025655
Kimando, L. N., Sakwa, M., Grace, M., & Njogu, W. (2012). Impact of Business Development Services on Enterprises in Rural Kenya: A Case Study of Micro and Small Enterprises in Muranga Town. International Journal of Business and Commerce, 1(9). www.ijbcnet.com
Kirzner, I. M. (1999). Creativity and/or alertness: A reconsideration of the schumpeterian entrepreneur. Review of Austrian Economics, 11(1–2), 5–17. https://doi.org/10.1023/a:1007719905868
Languilaire, J.-C. E. (2017). Businesses in Rwanda Sustainable Entrepreneurship, Marketing and Management for Sustainability. In International Business School JIBS Research Reports. www.ju.se
Lee, M. D. P. (2008). A review of the theories of corporate social responsibility: Its evolutionary path and the road ahead. International Journal of Management Reviews, 10(1), 53–73. https://doi.org/10.1111/j.1468-2370.2007.00226.x
Maros, H., & Juniar, S. (2016). Micro-credit Access and Growth of youth owned Micro and small retail enterprise in tharaka constituency, Kenya.
Mengstie, B. (2016). Impact of Business Development Services on Performance of Micro and Small Enterprises in East Amhara Region of Ethiopia. In European Journal of Business and Management www.iiste.org ISSN (Vol. 8, Issue 4). Online. www.iiste.org
Muathe, S.M.A. (2010). The Determinants of Adoption of Information and Communication Technology by Small and Medium Enterprises within the Health Sector in Nairobi, Kenya. Unpublished PhD Thesis, Kenyatta University
Muda, S., & Rahman, M. R. C. A. (2016). Human Capital in SMEs Life Cycle Perspective. Procedia Economics and Finance, 35(October 2015), 683–689. https://doi.org/10.1016/s2212-5671(16)00084-8
Muijs, D., West, M., & Ainscow, M. (2010). Why network? Theoretical perspectives on networking. School Effectiveness and School Improvement, 21(1), 5–26. https://doi.org/10.1080/09243450903569692
Muller, E. L., & Amit. (2000). 21. Theory Dev in Entrepeneurship.
Mwaniki, Z., Ngugi, P., & Nyang’au, S. (2022). Relationship Between Business Development Services and Growth of Small and Medium Enterprises in Kenya. European Journal of Business and Strategic Management, 7(1), 1–14. https://doi.org/10.47604/ejbsm.1480
Njawa, J. J. (2015). The effects of Advertising on Organizational Performance: A Case Study of Tigo Telecommunication Network. 80. http://scholar.mzumbe.ac.tz/bitstream/handle/11192/1062/MBA_Junior John Njawa_2015.pdf?sequence=1
Nyadida, R. A., & Otuya, W. N. (2021). C.(2021). Effects of business support services on performance of women owned small and micro enterprises in Mathare slums, Nairobi County. … Journal of Economics and Finance, 3 (7) …, 3(7). http://www.iajournals.org/articles/iajef_v3_i7_239_263.pdf
Ogunnaike, O., & Kehinde, O. (2013). Social networking and business performance: The case of selected entrepreneurs in Ota, Nigeria. Journal of Business Administration and Management Sciences Research, 2(5), 116–122.
Okyere, N. Y. D., Agyapong, G. K. ., & Nyarku, K. M. (2011). The Effect of Marketing Communications on the Sales Performance of Ghana Telecom (Vodafone, Ghana). International Journal of Marketing Studies, 3(4). https://doi.org/10.5539/ijms.v3n4p50
Ombi, N., Ambad, S. N. A., & Bujang, I. (2018a). The Effect of Business Development Services on Small Medium Enterprises (SMEs) Performance. International Journal of Academic Research in Business and Social Sciences, 8(3). https://doi.org/10.6007/ijarbss/v8-i3/3910
Ombi, N., Ambad, S. N. A., & Bujang, I. (2018b). The Effect of Business Development Services on Small Medium Enterprises (SMEs) Performance. International Journal of Academic Research in Business and Social Sciences, 8(3). https://doi.org/10.6007/ijarbss/v8-i3/3910
Parameth, C. (2017). Introduction to business development services.
Patel, J. D., Gadhavi, D. D., & Shukla, Y. S. (2017). Consumers’ responses to cause related marketing: moderating influence of cause involvement and skepticism on attitude and purchase intention. International Review on Public and Nonprofit Marketing, 14(1), 1–18. https://doi.org/10.1007/s12208-016-0151-1
Peter, F. O., Adegbuyi, O., Olokundun, M. A., Peter, A. O., Amaihian, A. B., & Ibidunni, S. A. (2018). Government financial support and financial performance of SMEs. Academy of Strategic Management Journal, 17(3), 1–10.
Ruzekova, V., Kittova, Z., & Steinhauser, D. (2020). Export performance as a measurement of competitiveness. Journal of Competitiveness, 12(1), 145–160. https://doi.org/10.7441/joc.2020.01.09
Rwanda Ministry of Trade and Industry. (2020). Wranda Entrepreneurship Development Policy. April, 1–60. https://www.minicom.gov.rw/fileadmin/user_upload/Minicom/Publications/Policies/Entrepreneurship_Development_Policy_-_EDP.pdf
Rwanda, U. N. (2014). Youth and Women Employment Government of Rwanda and One United Nations - Rwanda. 1–78.
Tang, Y. K. (2011). The influence of networking on the internationalization of SMEs: Evidence from internationalized Chinese firms. International Small Business Journal, 29(4), 374–398. https://doi.org/10.1177/0266242610369748
Uwitonze, M. (2016). Small and medium enterprises and job creation in Rwanda. http://dr.ur.ac.rw/bitstream/handle/123456789/84/UWITONZE Marc.pdf?sequence=1&isAllowed=y
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This work is licensed under a Creative Commons Attribution 4.0 International License
