A survey conducted by the KBA Centre for Research on Financial Markets and Policy in collaboration with the Japan International Cooperation Agency (JICA) showed ICT and Agriculture are the leading host sectors for Micro, Small and Medium-sized Enterprises (MSMEs) in Kenya.
The report, released on Tuesday 29th, also ranks manufacturing and construction among the dominant hubs for the enterprises that collectively create an estimated 15 million employment opportunities in the economy.
The 2021 MSMEs Survey Report indicates that over 90% of the 279 MSMEs sampled were registered, signalling a high level of formalization. Meanwhile, over half of the businesses were fully incorporated, with 35 % running as sole proprietorships.
According to the report, 80% of the enterprises operate a bank account in their business name, while 20% use personal accounts.
Additionally, the survey revealed that 54 % of the enterprises seek personal loans while 46 % obtain credit for business support, with only 22 % of the enterprises reviewed reporting having applied for start-up loans, out of which only 9 % was from banks; own savings 64% and non-loan support from family and friends 12 % While 83% of the MSMEs reported having had their loan applications approved within three months, 49 % said their borrowing from the different credit providers required collateral.
‘’At a time when economies worldwide and more so our domestic economy continues to be characterized by fragility and substantial slack due to the COVID-19 pandemic and its containment measures, any conversation on economic recovery in a sustainable way must be centred on strengthening the MSMEs sector, ‘’ said KBA Chief Executive Officer Dr Habil Olaka.
The development of MSMEs has also positively impacted employment, with the survey showing most of the businesses have less than ten full-time and part-time employees, respectively. Only 9 % of the enterprises are small (10-49 full-time employees), and 6.4 % are medium-sized (50-99 full-time employees), thus improving the living standards.
The survey, administered online from 7th to 21st May 2021, targeted MSMEs under the Kenya Bankers Association Inuka Enterprise Program. The initiative, which aims to de-risk the Micro, Small and Medium-sized Enterprises and facilitate access to formal credit, has reached over 12,000 businesses.
Read also; Kenya Government To Guarantee Loans Offered to MSMEs in New Bill.
