This archive report was first published on 18 July 2020.
Kenya's small and medium-sized enterprises (SMEs) are bracing for tougher times ahead, with a new survey indicating that more than half of them expect their business conditions to worsen in the next six months.
According to a survey conducted by SNDBX village, Wylde International, and Amethyst Consulting between March and early April, 54% of SMEs anticipate a decline in their business environment due to reduced cash flow and disrupted sales.
As COVID-19 cases continue to soar in Kenya, with over 11,000 cases reported, the government's measures to contain the pandemic have led to a financial crisis, with firms reacting by implementing pay cuts and reducing jobs.
Of the surveyed SMEs, 68% reported performing poorly in April compared to March, with key concerns being the struggle to pay employees, the probability of business losses, and the struggle to meet loan commitments.
“Most businesses are pessimistic about a change in their business finance environment in the next three to six months because of the struggle to pay employees, the probability of business losses and the struggle to meet loan commitments,” the survey notes.
Only 18% of SMEs expect a positive change in their business finances, while 8% see the situation remaining the same.
The survey involved 93 SMEs, with the majority falling in the consultancy services sector, closely followed by financial services, hospitality and tourism, and manufacturing.
As the pandemic continues to take its toll on businesses, the survey highlights the need for fresh funds to support SMEs, with 78% of respondents indicating that they do not plan to engage in any business development activities in the next three to six months.
