Dr. Benjamin Muindi

Do A students work for C students? In 2016, results from a survey of Micro, Small, and Medium Enterprises (MSMEs) were published, highlighting the characteristics of Kenyan businesses and their owners. A result that stood out was the educational attainment of business owners. First, MSMEs in Kenya are defined based on the number of people they employ. Micro enterprises employ 1 to 10 employees. Small businesses have 11-49 employees, while medium businesses have 40-99 employees. The chart below shows the highest education level attained by owners of licensed micro, small, and medium businesses. First, 33% of micro-businesses with less than ten employees are owned by people whose highest qualification is a high school certificate. 26% for those with only KCPE certificates. Only 14% of diploma holders and 8% of degree holders own micro-businesses. Second, 31% of small businesses with 11-49 employees are owned by individuals with degrees. Only 7% of these small businesses are owned by individuals with KCPE certificates alone, and only 19% of these businesses are owned by those with KCSE certificates alone. Third, 40% of medium businesses with 50-99 employees are owned by individuals with degrees, 15% are owned by individuals with diplomas, and 13% by individuals with KCSE and KCPE certificates. What we note from this is that the larger the business, the more likely the owner has a higher level of education. When we combine small and medium businesses so that we only look at enterprises with 11-99 employees, we get the chart below. Owners with degrees were overrepresented in small and medium businesses, followed by owners with diplomas, KCSE certificates, and, finally, KCPE certificates. I suspect this trend continues when we look at large businesses and corporations.