Academic journal article International Review of Management and Business Research

Do Women Entrepreneurs Play a Role in Reducing Poverty? A Case in Kenya

Academic journal article International Review of Management and Business Research

Do Women Entrepreneurs Play a Role in Reducing Poverty? A Case in Kenya

Article excerpt

1. Introduction

Poverty has been described in different ways by different scholars. Previous studies carried out by the World Bank (2001, p.4) indicate that poverty is categorized as both absolute and relative. Walkins (1995, p.41) explains that relative poverty can be categorized in relation to particular groups or areas in relation to the economic status of other members of the society. When poverty is said to be absolute, it describes a lack of basic security, the absence of one or more factors that enable individuals and families to assume basic responsibilities and to enjoy fundamental rights. Poverty results from and even consists of a lack of basic securities, which not only include financial resources, but also education, employment, housing, health care and other related aspects leading to deprivation (Gina, et al. 2006, p.5).

The World Bank (2001, p.6) has shown that lack of access to land and credit facilities is also a major cause of poverty in Kenya which leads to economic stagnation. Low growth rates of the economy have therefore encouraged the escalation of poverty, especially in the last 20 years. The World Bank also believes that political instability, lack of improvement in infrastructure, inadequacy of national policy and structural adjustment, lack of investment are among the main causes of poverty. The report observes that even though Kenyan women have better saving habits and operate a number of small enterprises, the poverty rates among them are still higher than their male counterparts at 50 percent and 46 percent in the rural and urban areas, respectively. This is in spite of the many policy interventions meant to improve people's standards of living. Thus, poverty is still higher amongst women in Kenya according to Institute of Economic Affairs (2008) report survey carried out in Kenya.

According to (UNDP) Human Development report (2006, p.8), 22.8% of Kenyans earn less than one US dollar a day while national poverty rate is at 52%, with low adult literacy rate of 26.4%. The majority of the poor are women who comprise 50% in the rural areas and 46% in the urban sector as revealed by The Institute of Economic Affairs (IEA) survey in Kenya (2008, p.18). Kimani and Kombo (2010, p.2) elucidate that over the past 30 years, policies, strategies and programmes implemented, aimed at reducing poverty among women yielded limited impact as a substantial number of Kenyans continue to languish in poverty.

The rising global economic crisis which began in 2004 worsened poverty status in many countries. Not only did it affect United States of America, but this spread to Europe and worldwide with investors losing confidence in countries that were mainly affected such as Greece, Portugal, Spain and Ireland (Taylor, 2011, p.4) among others; leading to heavy debt crises. This was equally reflected in Africa with Kenya being majorly affected in the tourism sector (Wanjohi, 2010, p.2) by cancellation of visits due to poor economic status overseas.

Ntale (2010, pp. 2-3) identified forms of entrepreneurship that can be used to reduce poverty. In his study, he points out that there is no universally accepted definition of entrepreneurship. However, there are two main approaches to defining entrepreneurship, the functional approach and indicative (traits) approach. The functional approach says an entrepreneur is what an entrepreneur does to make money. It specifies a certain function in business and deems anyone who performs this function to be an entrepreneur. While the indicative describes an entrepreneur by his/her contractual relations with other parties, his/her position in society in an effort to carry out business and create wealth.

The common form of entrepreneurship is starting new businesses, organizations or companies. The activities undertaken are different since they vary from one organization to another, but they basically lead to one goal, which is to create wealth. Kimani and Kombo (2010, p. …

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