Urgent support needed for MSMEs post-Corona
Tuesday, June 30th, 2020
As the world commemorated Micro-, Small and Medium-sized Enterprises (MSME’s) Day at an extraordinary period when the world grapples with Covid-19, it is abundantly clear that urgent support is needed to bolster these businesses whose contribution to sustainable development and the global economy is immeasurable.
As a national private sector lobby group, we join the rest of the world in marking this day and more importantly, highlight the importance and strong contribution of MSMEs to livelihoods, communities and economies; and to raise awareness on the need to support MSMEs toward their success and development.
The MSME sector, as per Central Bank of Kenya, constitutes 98 percent of all business in Kenya, creates 30 percent of the jobs annually and contributes three percent of the GDP.
The unprecedented shocks of the pandemic has seen world economies and business grapple with global supply chain disruptions, massive drops in demand in almost all sectors and loss of jobs just to mention a few.
We also appreciate the fact that life must go on; citizens have a basic right to a daily meal, decent and dignified income and at the very least be facilitated to earn a living.
To effectively resuscitate the economy, we have to adapt and embrace new measures as guided by the Ministry of health and the World Health Organisation (WHO).
According to a MSME survey conducted four years ago by the Kenya National Bureau of Statistics (KNBS), there were about 1.56 million licensed MSMEs and 5.85 million unlicensed businesses in both formal and informal sectors.
In a span of almost half a decade, this figure must have almost tripled but the pandemic scourge could have potentially spelt a death knell to their existence due to their fragile nature.
Commendably, the government, private sector and other stakeholders introduced timely interventions to save both lives and businesses.
However, it is instructive to note that majority of these business are not documented because they are either unlicensed establishments or are being operated at the household level.
As the Kenya National Chamber of Commerce and Industry (KNCCI), we have come up with multifaceted programs to formally enlist all these businesses through recruitment drives across all the 47 County Chamber Chapters to incorporate them in our national database.
And to improve their capacity and expertise to run businesses including the Mama Mbogas at the grassroots, the chamber has robust capacity building initiatives.
For instance, we are supplementing government efforts by training all chambers members on financial probity of business, book keeping, investments and also connecting them to ready markets for their products and services.
In the past, majority of the SMEs have suffered most because of failure to maintain proper financial records.
To continue playing their crucial role in creating decent jobs and improving livelihoods, small businesses depend more than ever on an enabling business environment, including support for access to finance, information, and markets.
Some of the interventions instituted by President Uhuru Kenyatta to cushion MSMEs from the ravages of the pandemic include directing the National Treasury to set aside Sh3 billion seed capital to operationalise the Credit Guarantee Scheme in order to reduce risk in lending since the ripple effect of their collapse in terms of loss of jobs and tax revenue will be tragic for the entire economy. - The author is the President KNCCI and Chairman of the Great Lakes Region (GLR)-Private Sector Forum (PSF)