The State Department of Micro, Small and Medium Enterprise (MSME) Development says it is alarmed by the increased number of small businesses closing shop and is rolling out more intervention measures to correct the situation.
“We are so concerned at the rate at which some MSMES are closing. It is really alarming and it is now forcing us to step up our efforts in terms of nurturing these MSMES so that they cannot wind up,” said Festas Wangwe, director of the central planning and monitoring unit in the State Department of MSME, during a Kenya Institute of Business Training (KIBT and Japan International Cooperation Agency (JICA) seminar this week.
A survey by the Kenya National Bureau of Statistics (KNBS) showed 2.2 million micro small businesses shut down in the five years ending 2016. The figure is an equivalent of approximately 440,000 MSMEs closing yearly.
“There are certain policies that we have to address that are really affecting the MSMEs ranging from multiple taxes especially from both from national and county governments. We have efforts we are putting in place to harmonize this so that MSMEs can be supported,” he said.
The JICA project, signed with the government in 2019, targets enterprises within Nairobi and its environs, Mombasa, Uasin Gishu and Nakuru counties. The term of cooperation runs from January 25, 2021 to February 28, 2025 with room for extension.
Hajime Iwama, chief representative of JICA Kenya office said while the project primarily targets MSMEs in the manufacturing sector, JICA has been able to support the value chain in other sectors through various collaborative initiatives.
“We are privileged to have undertaken trainings and pilot consultations in Mombasa County this year and we are grateful for the support provided by the county government,” said Iwama.
The project, among other deliverables, enhances the ability of small enterprises to access financing by equipping them with knowledge such as that of preparing financial documents for loan screening.
SMEs are also put in an ecosystem for interacting and collaborating with trade and financial institutions to improve their business processes and receive support from financial institutions and investors.
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