Small businesses, supported by widening access to credit, are emerging as critical pillars of economic resilience across Kenya’s counties, cushioning households against unemployment and uneven regional growth.
- •Data from the Gross County Product 2025 report show that participation in micro, small and medium enterprises (MSMEs) plays a decisive role in job creation, particularly in counties with limited formal sector opportunities.
- •The trend is most pronounced in rural and peri-urban counties, where self-employment often substitutes for salaried work.
- •By June 2025, licensed digital lenders had disbursed 5.5 million loans worth KSh 76.8 billion, increasingly filling financing gaps left by traditional banks, particularly for micro and small enterprises.
The expansion of small businesses has been reinforced by improved access to credit. Nationally, the share of adults with loans rose to 64% in 2024, up from 60.8% in 2021. Counties with higher MSME participation generally report stronger credit uptake, enabling traders to restock, farmers to smooth cash flows and informal enterprises to expand operations.
County-level data reveal sharp regional contrasts. Kilifi, Kwale and Kiambu posted some of the highest proportions of adults engaged in small businesses. Along the Coast, MSMEs are closely tied to agriculture, tourism and trade, while Kiambu benefits from proximity to Nairobi’s consumer markets and logistics networks. In these areas, small enterprises have become the primary drivers of household incomes and local demand.
Northern counties such as Wajir and Mandera still have low levels of both small business participation and credit access, reflecting insecurity, sparse markets and limited financial infrastructure.
