Scaling Up SMEs for Inclusive Growth

Kenya Association of Manufacturers has today launched its Business Growth Program (BGP) 2017. The program is geared towards uplifting Small and Medium Enterprises, through providing them with access to markets, capacity building strategies for their growth and expansion, and support in advocacy for a more nurturing environment.

Speaking during the launch, KAM Chairperson Ms Flora Mutahi said that SMEs are a huge untapped resource for the economy, and there is need to leverage the sector by building their capacity; through creating linkages and developing a sub contracting framework.

“SMEs are the backbone of the Kenyan Economy and they are expected to play a prominent role in job creation. Yet out of 7.4 million SMEs in the country only 1.6million are licensed. Formalization of businesses by SMEs in this country is a daunting task because the systems are not accommodating and may even seem punitive. We must correct this!

The value of the SME’s output is 33.8 per cent of the national output. SMEs face a relatively higher cost of capital than larger firms and more credit rationing due to the absence of collaterals. We can create a more SME friendly environment by lifting obstacles, enhancing flexibility and access to finance and international markets,” added Ms. Mutahi.

The Business Growth Programme will equip these enterprises with the required management systems and processes to secure their markets and thrive. It will further allow participants to develop their concrete business growth strategies, and formulate structures for implementation. BGP consists of seven modules including financial and human resource management, market design and strategic supply chain management, among others.

Partnering in this programme, Trademark East Africa Business Director, Ms. Waturi Matu said that they will continue to support efforts by the government and business community towards developing SME friendly policies. She cited recurring challenges faced by SME’s such as power outages, access to water and high crime rates are what limit their success factor.

Kenya Bankers Association representative, Mr Andrew Githaiga said that SME’s contribute largely to the banking portfolio. He further stated that an increase in finances provided for SME, from 190 million to about 203 million, is a sure sign that the growth of SME’s remains a banking priority.

“17% of a bank’s portfolio goes to SME’s. Though they have a 70% failure rate, within 3 years, banking is committed to helping the growth of SME’s. Corruption, unfair competition and changes in technology are some of the causes of business failure and developed the Inuka Enterprise to aid SMEs increase productivity and output,” added Mr Githaiga.

KAM CEO Ms Phyllis Wakiaga added that the purpose of the BGP is to create growth oriented enterprises. She noted that through the program, KAM will be able to facilitate and enable support to these businesses, that have specific sector issues.

“There is no future for industry without SME’s. They are creating more jobs than even the private sector. BGP is to make the SME sector more vibrant. We want to create inclusive, innovative and competitive business growth. Inclusive growth is important, it can be done by scaling up SME’s, to grow to bigger companies.” concluded Ms. Wakiaga.

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