Looking ahead, it is essential to urgently address the challenges facing MSMEs to ensure their sustained growth.
As Kenya is pushing its industrialisation and economic transformation in alignment with national, regional, and global agreements, the role of Micro, Small, and Medium Enterprises (MSMEs) is expected to be significant in achieving these goals.
MSMEs are an integral part of the Kenyan economy, significantly contributing to employment and income generation for millions of people in urban and rural areas.
According to a recent publication by the Kenya National Bureau of Statistics, MSMEs contribute more than 35 percent to the Gross Domestic Product, accounting for over 85 percent of all the jobs in the country.
This makes them critical in the realisation of the country’s economic transformation as outlined in different national strategies like the Bottom-up Transformation Agenda, County Integrated Development Plans, and Vision 2030.
And in the African Continental Free Trade Area (AfCFTA), which links 54 African nations into a larger trading bloc, MSMEs are expected to be the driving force. As intra-African trade expands, MSMEs stand to benefit the most, tapping into a market of 1.3 billion people and contributing to the projected $3.4 billion in economic gains.
But despite the significance of this key sector and the available opportunities for it in Kenya and Africa as a whole, MSMEs have continued to be boggled down by several challenges ranging from inadequate financial help, low connectivity to the internet, and slow adoption of technology to help in e-commerce.
This calls for an urgent need for business advisory, training, and mentorship programmes to help these MSMEs and budding entrepreneurs learn about management, financial planning, marketing, and other business development strategies to help propel their businesses.
Success stories
One of the shining examples from the support of the USAID Strategic Partnership Programme is the Aquaculture Barn Limited founded by Vincent Oduor. The organisation majors in fish farming.
Vincent’s dream was clear: to create a successful fish farming enterprise that would provide sustainable income for his team and benefit the community.
“The programme came into our lives just when we needed support. We wanted to expand our business. We had a vision for it but lacked the connection to markets and funds, “says Vincent.
The results were transformative. After the intervention, Aquaculture Barn’s first major fish harvest yielded Sh8.27 million in sales—a substantial increase from its previous earnings. This newfound financial success enabled the company to expand, adding three new fish cages to its existing five, which increased its production capacity and further strengthened the business.
The organisation’s success has had a profound impact on the local community.
By partnering with four women’s groups and several young entrepreneurs, Aquaculture Barn is helping others acquire fish cages and providing them with the technical support needed to thrive in the fish farming industry. This ripple effect improves small-scale fish farmers' incomes and contributes to the region's food security and economic resilience.
Through Kenya Small Business Development Centres (Kenya SBDC), a project under the USAid Strategic Partnership Programme across six counties namely: Kiambu, Kisumu, Nakuru, Isiolo, Makueni, and Mombasa, MSME are now progressively gaining momentum by increasing sales, expanding their market reach, creating employment, and improving their livelihoods.
This has been made possible through collaboration with the respective county governments to put entrepreneurship and innovation at the forefront of development.
Advisory services
To this extent, the SBDCs have capacity built more than 10,000 MSMEs, 60 percent of whom are women and 40 percent men. Out of this, more than 2,000 continue receiving regular business advisory and network opportunities. From this group thanks to the Regular Business Advisory, business, MSMEs, have quadruple and some cases quintupled.
It has also facilitated access to more than Sh250,000,000 in funding for MSMEs, enabling significant business growth and development. And the Aquaculture Barn's story is just one example of how the USAid Strategic Partnership Programme is making a tangible difference in Kisumu County.
By providing one-on-one advisory services to MSMEs, the programme is empowering MSMEs to overcome challenges, achieve sustainable growth, and improve the livelihoods of their communities.
Reform areas
Looking ahead, it is essential to urgently address the challenges facing MSMEs to ensure their sustained growth. Doing so will significantly boost national productivity and drive economic transformation.
In addition to implementing capacity-building initiatives, key policies, and national frameworks, beginning with the Micro and Small Enterprise Act of 2012, need to be reviewed.
This review will help create a more supportive environment, enabling them to thrive and contribute more effectively to Kenya's economic development.
The writer is Chief of Party, USAid Strategic Partnership Program and former executive director Strathmore University Business School
