Business in Kenya: Kenya’s micro, small and medium business are the base of entrepreneurial development in Kenya and the ’seed bed’ for inculcating an entrepreneurial culture and supporting rural industrialisation.
A lot has been done to improve the business environment for small businesses. In 2009, records at the Companies Registry were digitised. Small businesses will now be able to apply and pay for licenses online, including by mobile phone payments.
The Kenya Government has also reduced the time required to start a business and halved time to pay taxes and statutory contributions, It has licensed micro-finance banks and allowed agency banking.
ln the 2010-2011 Budget, a Sh3.8 billion($47.5 million) fund was set up through which the Government will enter credit facility agreements with some banks to support Small and micro-enterprises. From the kitty, Sh3 billion ($37.5 million) will be advanced to banks and financial institutions to lend to SMEs and Sh800 million ($10 million) will be for agencies capacity building and training of beneficiaries.
The banks are expected to match Sh5 ($0.0625) for each Sh 1 ($0.0125) invested by the Government, boosting the kitty live—fold to Sh15 billion ($187.5 million).
The programme targets 12 million Kenyans using the mobile money transfer platform and eventually cover the close to 20 million Kenyans who own mobile phones. This is expected to create 100,000 jobs for young people. To encourage the development of innovative industries for sustaining the country’s competitive advantage, the following must be done:
- Identification of sites for industrial parks and special economic zones
- Development of industrial parks, special economic zones and industrial clusters
- Facilitation of the simplification and decentralisation of the registration, licensing and taxation regimes
- Facilitation and coordination of development and implementation of programmes and initiatives for business incubation and start-ups
- Creation of new incentives for rural industrialisation.
The Kenya Vision 2030 blueprint recognises the crucial role of micro, small and medium business in industrial development and emphasises the development of industrial parks in five towns – Kisumu, Mombasa, Eldoret, Nakuru and Nairobi – to spur industrial growth. It also proposes the development of two special economic zones in Kisumu and Mombasa.
Assistance to Micro and Small Enterprises Programme (ASMEP) is a Government initiative to support micro and small enterprises. The European Commission (EC) is funding it and it took effect on September 26, 2007. lt will be implemented over a five-year period. The Ministry of Trade is the principal ASMEP host institution, and acts on behalf of the National Authorising officer in managing and supervising the programme. ASMEP supports the development 0f micro and small enterprises through capacity building of business associations and other non – State actors that promote and develop MSEs, business development service providers and micro-institutions.
It also disseminates business information through business information centres or other initiatives and support agro-processing, packaging and value addition, especially in horticulture and fisheries .