Kenya is laying the groundwork for a potential state-backed digital marketplace that will target micro, small and medium enterprises (MSMEs) by opening a feasibility study that could reshape how millions of small businesses access online trade.
- •In an expression of interest issued by the State Department for Micro, Small and Medium Enterprises Development, the government is seeking consultants to assess whether to scale up existing private digital marketplaces or develop a separate government-led or public–private platform.
- •The study falls under the Kenya Jobs and Economic Transformation Project (KJET), a multi-component initiative supported by the World Bank.
- •At stake is how Kenya integrates its vast MSME sector, which is the backbone of the economy, into formal digital commerce channels.
The feasibility study is structured to preserve multiple implementation pathways. One option under consideration is expanding existing private platforms by identifying policy, financial and coordination mechanisms through which the government can increase MSME participation.
The assignment will evaluate demand for a digital marketplace by profiling MSME segments, mapping priority value chains, and assessing the transaction needs of both sellers and buyers. It will also examine why uptake of current private platforms has remained limited despite widespread mobile money use and a relatively mature digital payments ecosystem anchored by services such as M-Pesa.
Alternatively, the study will assess the viability of establishing a government-led or public–private marketplace. Under this scenario, the consultant will be required to estimate operational and financial costs, identify potential revenue streams, and determine the scale and duration of any public subsidies required. The analysis will also include break-even projections under different operating models and propose governance structures, oversight mechanisms, and risk mitigation measures.
According to data from the Central Bank of Kenya (CBK), the country has roughly 7.4 million MSMEs employing an estimated 14–16 million people, with the sector accounting for about 40% of GDP and the vast majority of job creation each year. Available data also suggests that MSMEs in Africa are held back from the digital marketplace due to the lack of operational capacity to use e-commerce platforms and the fear of fraud.
A central component of the study will also involve assessing Kenya’s readiness to support broader participation in digital marketplaces. This includes connectivity and device access, interoperability of digital payments, hosting and cybersecurity capacity, and the effectiveness of last-mile logistics systems that remain uneven across the country.
The consultant will also analyze licensing and registration requirements, consumer protection rules, data protection obligations, and cybersecurity standards, alongside trust-related constraints such as dispute resolution mechanisms and platform accountability.
The broader KJET program, under which the study is being conducted, targets regulatory bottlenecks, weak buyer–supplier linkages and market information gaps that have constrained MSME growth.
