Leveraging Dynamic Capabilities to Overcome Financing Barriers and Drive Sustainability of Solar Social Enterprises in Kenya
Keywords:
Dynamic capabilities, social enterprises, financing, sustainability, social entrepreneurship
Abstract
This study examined how financing and dynamic capabilities, affect the sustainability of solar social enterprises (SSEs) in Nairobi County, Kenya. Against the backdrop of persistent energy access challenges in sub-Saharan Africa, the research aimed to find out how SSEs navigate financing barriers and leverage dynamic capabilities to achieve sustainable growth. Employing a qualitative case study approach, the study draws on in-depth interviews with SSE founders and managers, triangulated with business documents and sectoral reports. Key findings reveal that SSEs face significant obstacles in accessing finance, including perceived bias, banks’ risk aversion, and rigorous due diligence requirements - challenges that disproportionately affect locally owned enterprises. The study found entrepreneurial alertness, strategic agility and resource orchestration as the entrepreneurial dynamic capabilities enabling SSEs to mobilize resources, adapt to market shifts, and sustain operations. The study concludes that adapting financing models to local contexts and supporting the development of dynamic capabilities are vital for the long-term growth of SSEs. Interventions fostering inclusive investment and capacity-building are recommended to advance sustainable growth in Kenya’s dynamic solar sector.
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References
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19. Corbin, J., & Strauss, A. (2015). Basics of qualitative research: Techniques and procedures for developing grounded theory (4th ed.). Thousand Oaks, CA: Sage Publications
20. Cross, J., & Murray, D. (2018). The afterlives of solar power: Waste and repair off the grid in Kenya. Energy Research and Social Science, 44, 100–109. https://doi.org/10.1016/j.erss.2018.04.034.
21. Dejardin, M., Raposo, M. L., Ferreira, J. J., Fernandes, C. I., Veiga, P. M., & Farinha, L. (2022). The impact of dynamic capabilities on SME performance during COVID-19. Review of Managerial Science, 17. https://doi.org/10.1007/s11846-022-00569-x
22. Doz, Y., and M. Kosonen. 2010. “Embedding Strategic Agility: A Leadership Agenda for Accelerating Business Model Renewal.” Long Range Planning 43, no. 2–3: 370–382
23. ESMAP, GOGLA & Dalberg (2024). Off-Grid Solar Market Trend Report 2024. Washington, DC: The World Bank. https://www.esmap.org/Off-Grid_Solar_Market_Trends_Report_2024
24. Fabrizio, K.R., et al. (2021).
25. Gioia, D. A., Corley, K. G., & Hamilton, A. L. (2013). Seeking qualitative rigor in inductive research. Organizational Research Methods, 16(1), 15–31. https://doi.org/10.1177/1094428112452151
26. Hain, D. S., & Jurowetzki, R. (2018). Local competence building and international venture capital in low-income countries: Exploring foreign high-tech investments in Kenya’s Silicon Savanna. Journal of Small Business and Enterprise Development, 25(5), 447–482. https://doi.org/10.1108/JSBED-03-2017-0092
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28. Hernández-Linares, R., Kellermanns, F. W., & López-Fernández, M. C. (2018). Dynamic Capabilities and SME Performance: The Moderating Effect of Market Orientation. Journal of Small Business Management, 59(1). https://doi.org/10.1111/jsbm.12474
29. Intellecap. (2015). Closing The Gap Kenya: Update on key challenges for the ‘missing middle’ in Kenya. Intellecap.
30. Intellecap. (2019). Kenya impact investment landscape. Intellecap.
31. Ireri, B., & Shirley, R. (2021, September). Powering growth. Finance and Development, 62–64. https://www.imf.org/en/Publications/fandd/issues/2021/09/fighting-climate-change-in-Africa-ireri
32. Kenya National Bureau of Statistics. (2017). Micro, small and medium establishments: Basic report. KNBS. https://www.knbs.or.ke/?wpdmpro=2016-msme-basic-report
33. Kyalo, D., Gitau, F., Kim, S., & Almaguer, F. (2023). Entrepreneurial ecosystem snapshot: Green entrepreneurship in Kenya. Aspen Network of Development Entrepreneurs . https://andeglobal.org/wp-content/uploads/2023/02/ANDE_Ecosystem-Snapshot_Green-Entrepreneurship-in-Kenya.pdf
34. Littlewood, D., & Holt, D. (2018). Social enterprise resilience in sub-Saharan Africa. Business Strategy & Development, 1(1), 53–63. https://doi.org/10.1002/bsd2.11
35. Littlewood, D., & Holt, D. (2018). Social enterprise resilience in sub-Saharan Africa. Business Strategy & Development, 1(1), 53–63. https://doi.org/10.1002/bsd2.11
36. Luo, Y., & Rui, H. (2009). An ambidexterity perspective towards multinational enterprises from emerging economies. Organization Science, 13, 48-63.
37. Mafimisebi, O. P., & Nyame-Asiamah, F. (2021). A new look at case study approach in African entrepreneurship research. In O. Kolade, D. Rae, D. Obembe, & Woldesenbet B. (Eds.), The Palgrave Handbook of African Entrepreneurship (pp. 595–618). Palgrave Macmillan. https://doi.org/10.1007/978-3-030-75894-3_24
38. Manwari, L., Ngare, P., & Kipsang, R. (2017). Access to finance for women entrepreneurs in Kenya: Challenges and opportunities . Journal of Emerging Trends in Economics and Management Sciences, 8(1). https://doi.org/10.10520/EJC-803c7be1e
39. Mason, C., & Brown, R. (2014, November 7). Entrepreneurial ecosystems and growth-oriented entrepreneurship [Conference presentation]. Workshop rganized by the OECD LEED Programme and the Dutch Ministry of Economic Affairs, The Hague, Netherlands. https://www.oecd.org/cfe/leed/entrepreneurial-ecosystems.pdf
40. McEachran, R. (2013). McEachran, R. (2013, December 3). African social enterprises pave the way for solar power while stimulating the local economy. The Guardian. https://www.theguardian.com/social-enterprise-network/2013/dec/03/african-social-enterprises-solar-power
41. Miller Center for Social Entrepreneurship. (2015). Universal energy access: An enterprise system approach. Santa Clara University. https://www.millersocent.org/wp-content/uploads/2020/01/UniversalEnergyAccess-MillerCenterWhitePaperEditedUnitedNationspg.11.pdf
42. Mungai, F., & Peacock, C. (2019, July 16). Impact investment favours expats over African entrepreneurs. Here’s how to fix that. World Economic Forum. OECD. (2017).
43. Park, E., Martins, R. M., Hain, D. S., & Jurowetzki, R. (2017). Mapping entrepreneurial ecosystem for technology start-ups in developing economies: An empirical analysis of Twitter networks between start-ups and support organizations of Nairobi’s digital economy. In: C. Daniels, M. Dosso, & J. Amadi-Echendu (Eds.), Entrepreneurship, technology commercialisation, and innovation policy in Africa, pp. 55–97. Springer. https://doi.org/10.1007/978-3-030-58240-1_4
44. Park, J. (2021). Theorizing and learning from Kenya’s evolving solar energy enterprise development. Energy Research & Social Science, 81, 102254. https://doi.org/10.1016/j.erss.2021.102254
45. Phillips, J., Plutshack, V., & Yeazel, S. (2020). Lessons for modernizing energy access finance, Part 1: What the electrification experiences of seven countries tell us about the future of connection costs, subsidies and integrated planning. Duke University. https://energyaccess.duke.edu/publication/learning-from-the-past/
46. Power Africa (2023) Demystifying securitization for solar pay-as-you-go companies. Power Africa.
47. Rashid, S., & Ratten, V. (2021). Entrepreneurial ecosystems during COVID-19: The survival of small businesses using dynamic capabilities. World Journal of Entrepreneurship, Management and Sustainable Development, 17(3), pp. 457 –476. https://doi.org/10.1108/wjemsd-09-2020-0110
48. Riviere, M., Bass, A. E., & Andersson, U. (2020). Dynamic capability development in multinational enterprises: Reconciling routine reconfiguration between the headquarters and subsidiaries. Global Strategy Journal, 11(2). https://doi.org/10.1002/gsj.1389
49. Roundy, P.T., Harrison, D.A., Khavul, S., Pérez-Nordtvedt, L. and McGee, J.E. (2018). “Entrepreneurial alertness as a pathway to strategic decisions and organizational performance”, Strategic Organization, Vol. 16 No. 2, pp. 192-226.
50. Sanyal, S., Chen, C. & Caldwell, M. (2020). The impact investors’ blind spot: Local clean energy entrepreneurs in Kenya. (Working paper). World Resources Institute. https://www.wri.org/research/impact-investors-blind-spot-local-clean-energy-entrepreneurs-kenya
51. Sanyal, S., Prins, J., Visco, F., & Pinchot, A. (2016). Stimulating pay-as-you-go energy access in Kenya and Tanzania: The role of development finance. World Resources Institute. https://www.gogla.org/sites/default/files/recource_docs/stimulating_pay-as-you-go_energy_access_in_kenya_and_tanzania_the_role_of_development_finance.pdf
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Published
2025-10-10
How to Cite
Kahinga, E., Kitonga, D., & Kinyua, L. (2025). Leveraging Dynamic Capabilities to Overcome Financing Barriers and Drive Sustainability of Solar Social Enterprises in Kenya. European Scientific Journal, ESJ, 46, 15. Retrieved from https://eujournal.org/index.php/esj/article/view/20149
Section
ESI Preprints
Copyright (c) 2025 Esther Kahinga, Daniel Kitonga, Lucy Kinyua
This work is licensed under a Creative Commons Attribution 4.0 International License.
