In as much as the micro and small enterprises are a huge contributor in the country’s economy, especially in the manufacturing sector, the sector is grappling with bottlenecks that are choking it’s growth.
Here are some of the reasons why the sector is struggling to thrive.
Lack of Adequate skills
Kenya lacks the adequate skills that can produce a solid pool of internationally competitive, technology enabled businesses.
According to World Bank, micro and small enterprises (MSEs) which are key drivers of the economy face difficulties in improving their productivity due to poor managerial practices and information failures around how to upgrade.
The country, says the bank, also has limited contact between traditional industry and technology enabled startups; a missed opportunity for both sides.
“Kenya’s other challenge includes limited connections to networks of international mentors, angel investors, and venture capitalists all of which make it difficult for local startups and SMEs to grow and compete internationally. For Kenyan women entrepreneurs, particularly those who own startups and SMEs; all these challenges are even more pronounced.” The statement adds.
There is hope
There’s however a ray of hope.
According to Senior Private Sector Specialist and Task Team Leader at World Bank, Elena Gasol Ramos, in today’s fast-paced, globalized economy, start-up driven innovation is key for economic development as it creates new jobs for the growing youth demographic.
“By strengthening technology incubators and accelerators, the Kenya Industry and Entrepreneurship Project will directly benefit 250 SMEs, 640 students, 15 corporates, 162 startups, 30 technology hubs and 7 technology bootcamp providers,” says Ramos.
World Bank therefore has under its wings the International Development Association (IDA), which established in 1960 with the aim of helping the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives.
IDA is one of the largest sources of assistance for the world’s 75 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.5 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $18 billion over the last three years, with about 54 percent going to Africa.