MSME Access to Public Procurement in Kenya: Evidence Ten Years After the AGPO Policy

Micro, Small, and Medium Enterprises (MSMEs) play a critical role in economic development, employment creation, and innovation in developing economies. Public procurement has increasingly been recognized as an important policy instrument for promoting inclusive economic growth by expanding business opportunities for MSMEs. In Kenya, procurement reforms such as the Access to Government Procurement Opportunities (AGPO) initiative and provisions under the Public Procurement and Asset Disposal Act were introduced to enhance MSME participation in government contracting. Despite these reforms, many MSMEs continue to face structural barriers that limit their effective participation in public procurement markets. This study examines the determinants of MSME participation in public procurement by focusing on access to procurement information, financial capacity, and digital procurement adoption. Guided by the Resource-Based View (RBV) and Institutional Theory, the study analyzes how institutional factors and firm-level capabilities influence MSME engagement in procurement markets. Data were collected from 305 MSMEs registered under the AGPO program in Kenya and analyzed using Structural Equation Modeling (SEM). The results indicate that access to procurement information has the strongest positive influence on MSME participation (β = 0.41, p