This archive report was first published on 12 December 2019.
On December 12, 2019, a new survey shed light on the challenges facing small and medium-sized enterprises (SMEs) in Kenya. The survey, conducted by the Kenya Private Sector Alliance (Kepsa), revealed that poor policies are the main obstacle hindering the growth of these businesses.
According to the Kenya Medium Small and Micro Enterprises (MSMSE) Policy Index 2019, unresponsive policies are the primary reason why startups stagnate or even collapse a few years after being established. This is because the owners of these businesses are often not involved in the policy-making process, making it difficult to create enabling policies that can provide a sound foundation for their expansion and takeoff.
While the policy environment is a significant challenge, the implementation of existing policies is also wanting. For instance, the Access to Government Procurement Opportunities programme, launched in 2013, aimed to allocate 30 percent of public tenders to youth, women, and the disabled. However, the programme has been marred by poor implementation, with some State agencies failing to meet the allocation. Moreover, when these entrepreneurs do secure tenders, they often face delayed payments from the government, putting their operations at risk.
Some SMEs have been forced to shut down after spending almost all their resources on servicing tenders. This demonstrates that good policies and creative ideas are not enough; effective implementation is crucial for their success. To thrive, SMEs need the support of both the State and the private sector. Moreover, owners of these businesses must play a central role in shaping policies that affect them. They also require adequate funding, guidance, mentorship, and critical skills such as marketing and financial management to scale their businesses and contribute to the national economy.
