Entrepreneurial capabilities under credit and institutional constraints: Evidence from informal metalworking enterprises in Kenya
摘要
Small-scale manufacturing in informal economies requires fixed machinery, material inputs, and technical expertise, yet entrepreneurs often operate under persistent financial and institutional constraints. Although limited access to credit is widely recognized as a barrier to enterprise development, less is known about how informal manufacturers sustain production and business continuity under such conditions. This study examines how informal metalworking enterprises in Nairobi, Kenya, manage these constraints and sustain their operations. Using a mixed-methods design, the study combines survey data from two major metalworking clusters, Kamukunji and Kariobangi, with qualitative case studies based on in-depth interviews with entrepreneurs. The quantitative findings reveal significant differences in production systems, investment requirements, and financing practices between the two clusters. In particular, the order-basedproduction systems prevalent in Kariobangi require greater investment in machinery and continuous access to working capital than the make–to–stock system observed in Kamukunji. The qualitative analysis identifies three interrelated domains of entrepreneurial capability—production-related, financial, and relational—that enable entrepreneurs to sustain production. Rather than operating independently, these capabilities interact dynamically throughout the order acquisition–production–delivery process, enabling entrepreneurs to coordinate production activities, manage cash-flow constraints, and leverage social and business relationships to secure orders and access external equipment. This study contributes to the literature on entrepreneurship and informality by demonstrating that enterprise sustainability in informal manufacturing depends not only on access to finance but also on the dynamic interaction of entrepreneurial capabilities that support business continuity under persistent financial and institutional constraints.