GARISSA: The government is taking steps to tackle the challenges facing Micro, Small, and Medium Enterprises (MSMEs) in the country, aiming to create a supportive environment for their growth and sustainability. The MSME draft policy 2025, currently undergoing public participation, is designed to establish a conducive business environment that fosters productivity, competitiveness, and sustainability for wealth and employment creation.
According to Kenya News Agency, the policy seeks to address several critical issues plaguing the sector, including limited access to finance, inadequate infrastructure, a lack of skilled labor, limited market access, and insufficient technology adoption. Other challenges identified include regulatory and compliance issues, a deficiency in business skills and training, a lack of coordination among development partners and stakeholders, and vulnerability to shocks such as flooding and pandemics.
Once implemented, the policy will aim to formalize unregistered MSMEs, promote an entrepreneurial culture, enhance skills development, and encourage innovation and research within the sector. It also intends to improve access to diverse and affordable financial products and services, while bolstering the resilience and adaptability of MSMEs.
Speaking at a public participation forum in Garissa, Reynold Njue, the Acting Director for Planning, Partnership and Advocacy at the State Department for MSME Development, emphasized the policy’s role in supporting the sector. He highlighted the challenges identified by the policy, such as access to finance, markets, and infrastructure, and outlined eight key objectives aimed at ensuring the productivity, competitiveness, and sustainability of MSMEs. Njue noted that many MSMEs struggle to survive beyond their fifth year and often remain micro enterprises without transitioning to small or medium enterprises.
Garissa County Commissioner Mohamed Mwabudzo underscored the importance of MSMEs for income generation and wealth creation, stating that the country’s growth is contingent on active participation in these areas. He stressed the need to move away from reliance on free income and towards creating wealth and jobs.
Once approved, the policy will be applicable at both national and county levels, targeting MSMEs and supporting institutions, including private sector entities, development partners, and non-state actors. Nationally, it will guide strategic planning, regulatory frameworks, and resource allocation to create a supportive MSME ecosystem. At the county level, the policy will inform local policy development, implementation, capacity building, infrastructure development, and market access tailored to regional needs.
According to the Kenya National Bureau of Statistics’ 2016 MSME Survey, there are over 7.4 million MSMEs in Kenya, employing more than 14.4 million people across various sectors and contributing approximately 33.8 percent to the national GDP in 2015. The sector’s contribution to GDP has since increased to 40 percent, as reported by UNDP and MSEA in their study on the impact of COVID-19 on Kenyan MSMEs. The sector generates around 800,000 jobs annually, providing opportunities for low-skill and economically excluded individuals, including youth, women, and persons with disabilities.