A survey has established that close to 6 million Micro and Small Medium Enterprises (MSME’s) across the country are operating without licences. The report says that out of the cumulative 7.41 million MSME’s businesses in the country only 1.56 million were licensed.
The findings, however, show that the MSME sector contributes 28.5 percent of the country’s total economy, accounting to Ksh1.6 trillion of the country’s Gross Domestic Product. While unveiling the report today at the Kenyatta International Convention Centre, Devolution Cabinet Secretary Mwangi Kiunjuri lauded the survey.
Kiunjri said the survey had provided an insightful and useful baseline data for systematic approach towards review of policies and designing strategic interventions that foster the growth of the sector at both levels of government.
“The survey is designed to provide comprehensive data at national and county levels on the characteristics, operations, dynamics and evolving nature of micro, small and medium-scale enterprises in Kenya,” Kiunjuri said.
In a speech read on his behalf by Planning and Statistics Principal Secretary Saitoti Torome, the Cabinet Secretary said adequate knowledge of the MSME sector in the country is fundamental for economic recovery, poverty reduction initiatives and attainment of Kenya’s status as an industrialised nation.
He observed that over the last five decades, MSMEs had emerged as a highly vibrant and dynamic sector of the country’s economy.
Not only do MSME’s provide large employment opportunities at comparatively lower capital cost than large industries, but they also facilitate acceleration of rural areas’ industrialization.
The development had led to reduced regional imbalances assuring more equitable distribution of national income and wealth,” the Cabinet Secretary added. Naming high mortality rates of MSME’s and stunted growth trajectory as some of the constraints faced by the sector, Kiunjuri said the government would articulate favorable policies and champion initiatives that support the growth of MSME’s across the country.
“These initiatives will include tax incentives, direct government interventions through financial institutions, credit guarantee schemes and other forms of subsidized financing,” he said.
The Cabinet Secretary pointed out that the Devolution Ministry will lobby both County and National governments’ assemblies to pass laws and regulations that provide for a conducive environment as well as establishing necessary support framework that supports MSME’s.
The Principal Secretary said the survey will assist the government to come up with effective recommendations on how to revamp the Jua Kali sector. Saitoti called on the Kenya National Bureau of Statistics to adopt a policy that will facilitate survey documentation of MSME’s after every five years.
He said the statistics will simplify and capture accurate data documentation and analysis. The last finding on Micro and Small Medium Enterprises was last carried out in 1999. The survey further indicates that government, non-MSME’s and direct exports constitute a very small consumer of MSME’s products.
It also shows that 62 and 46.2 percent of licensed and unlicensed business entrepreneurs do not like borrowing loans due to high interest rates. (KNA)