Rural-based Small and Medium Enterprises, SMEs, (such as those found in Kesses division, Uasin Gishu
District) are constrained largely by the problems associated with the government’s regulatory frameworks,
relative to their urban counterparts. This is contrary to the general view that urban-based enterprises are more
negatively affected by the regulations as opposed to rural enterprises. This could be mainly because urban-based
entrepreneurs know how to evade the authorities and effectively manage the consequences and costs of noncompliance,
or comply and make minimal profits. However, rural-based entrepreneurs have demonstrated a rare
ability to get started, grow, compete and survive even longer than some urban-based SMEs even when they
choose to comply with the Government Regulations and Procedures. Currently, few studies have been done to
establish this unusual resilience of rural SMEs. The main objective of the survey was therefore, an attempt to
shed more light on how government regulations and procedures affect the establishment (starting) of rural-based
enterprises. This was done bearing in mind that government regulatory frameworks have costs whether an
entrepreneur complies or not. More specifically, the study looked at the impacts of government regulations and
procedures on the establishment of rural-based SMEs as exemplified by those in Kesses Division, Uasin Gishu
District, Kenya. The findings of the study would be used to improve the policy environment since the real
impacts of the regulatory constraints would have been brought to light. This would then assist in the
improvement of the rural SMEs and hence the sector as a whole in its development and provision of
employment.
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