Micro, small and medium scale enterprises (MSMEs) have formally launched a national umbrella body to drive the formalisation of the sector as well as champion their interests.
The entity, Micro, Small and Medium Enterprises Alliance of Kenya, will be tasked with making sure the sector, boasting 7.4 million members, transitions from an informal to formal segment.
The alliance’s CEO Sammy Karanja said out of the 7.4 million members, only 1.56 million are licensed, leaving the 5.85 million unlicensed operating unrecognised.
He said the sector has for a long time been identified as informal because it is informally organized lacking certificate of registration, a situation they now want to change.
Despite the sector accounting for 98 per cent of all the businesses in Kenya, it is often left out of the negotiation table or out of formulation of policies affecting them.
“We are here to state that we are capable of organising ourselves to be given slots in the negotiation table and not be on the menu, which has been the case for a long time now. It is very important for the MSMEs to be taken care of,” said Mr Karanja.
He was speaking at KICC during the graduation of their members who had been trained by Equity Group Holdings.
Mr Karanja pointed out that a recent study by the Central Bank of Kenya established that the sector constitutes 98 per cent of all business in Kenya creating 60 per cent of the available jobs and also the largest active contributor to the country’s gross domestic product annually.
He said the training partnership with Equity covers areas of finances, youth opportunities, risk assessment and mitigation, new market linkages and emerging business trends in the country and other regions.
The Alliance’s President Ben Mutahi said despite MSMEs playing a crucial role in the economic growth, the sector’s huge potential remains untapped.
To bridge the gap, he said, the alliance has been established to provide a unified single voice for MSMEs in Kenya so as to influence policy through structured engagement with the government and other stakeholders to further the growth of the sector.
“We started this journey almost a decade ago but we decided to formalise this umbrella as a national outfit through having strong structures and operational systems to address the plight of micro, small and medium entrepreneurs,” said Mr Mutahi.
He said the Alliance will give them more strength while lobbying for policies and matters affecting the sector.
Mr Mutahi said the Covid-19 pandemic saw 30 per cent of their businesses closed down due to curfews, trade restrictions, high financial and tax burdens by the end of the year 2021.
“We urge the future government administrations to facilitate the sector to start manufacturing by providing tax holidays, incentives, and through special economic zones offer operational spaces for cottage industries and assembly points,” he said.
Equity Bank Kenya Managing Director Gerald Warui, who spoke on behalf of Equity boss James Mwangi, said a Sh700 billion kitty had been rolled out to MSMEs in the East African region to be shared between Kenya and the other five countries; Tanzania, Uganda, Rwanda, DRC and South Sudan.