Challenges facing cybercafe businesses in Nairobi

Abstract

The purpose of this study was to establish challenges cybercafe businesses in Nairobi face. The objectives were to identify major challenges facing cybercafes; characteristics of successful entrepreneurs in cybercafe businesses and possible remedies cybercafe owners/managers can apply to their businesses to avoid failure. Stratified random sampling and snowballing methods were used to sample 173 respondents of cybercafe owners in Nairobi out of which 31 operated businesses that closed. Data were collected using a questionnaire. Analysis of the data was done using SPSS program. The major findings were that successful cyber cafes are run by young and highly educated managers, have higher chances of obtaining loans from financial institutions and are located in/near CBD. On the other hand, failed firms are those that had their owners' capital declining over time, are located far from CBD and are insecure. The major findings of this study are that many firms have difficulties in accessing business credit, limited experience on business management skills since the research showed that over 60% of the existing firms and 51% of the closedfirms were owned by people who were below 30 years old. The growth and existence of the existing firms were supported by the growth in owners' capital, whereas the closed firms had the owners capital diminishing and they were not able to access credit so as to refinance their business operations. This shows that most of the firms are young and provide a pointer to the other research findings that most MSEs do not survive beyond five years. The main challenges identified in the study among the successful and failed cyber cafes include limited access to business credit and lack of business management skills, among others. The study concludes by recommending for adequate business management and technical skills for entrepreneurs, proper identification of business location, and increased access to business credit to enhance growth and development of cybercafes in Nairobi.