Industry and Enterprise Development Principal Secretary Julius Korir (right) admires an antivirus developed by an SME at the Kenyatta International Conference Centre on Thursday when he visited Data-Guard Distributors Ltd stand during the official opening of a forum for Small and Medium Enterprises (SME). The forum is held as an opportunity to learn, network and share business to business (B2B), business to Government (B2B) networking opportunity.
The growth of Small and Medium Enterprises (SMEs) remains a top priority for the Government because they form key pillars in Kenya’s ten year Industrial Transformation Programme (KITP), Principal Secretary in State Department for Industry and Enterprise Development Julius Korir has said.
Mr Korir acknowledged that SMEs form a core pillar of economic activity contributing close to 25 per cent of the Gross Domestic Product. They also provide employment to more than 11 million Kenyans.“To survive, grow and graduate into multinational corporates, SMEs need to competitively produce innovative quality products that meet the fast changing global consumer needs and preferences,” PS Korir stated.
He commended SMEs for sourcing their materials locally, which enhances value addition, supports local supply chains and creates forward and backward linkages.
“The multiplier effect created is good for the economy. SMEs are therefore very good vehicles for utilising local materials including local human resources which spur wealth generation and job creation,” the PS pointed out, adding that SMEs are the bedrock of the country’s industrialisation process.
The PS was addressing participants at the SME FEST 2016 Expo and Conference at the KICC on Thursday, where he represented the Cabinet Secretary for Industry, Investment and Trade Adan Mohamed.
He lauded the event’s organisers for providing the opportunity to showcase the growth and development of Kenya’s SMEs, while also enabling them to learn, network and meet relevant players to their respective value chains and business operations.
PS Korir noted that the forum themed, “Innovative solutions to boost SMEs revenue” captures the Government’s commitment to nurturing, expanding and growing SMEs into major players in economic development of the region.
He said the State has leveraged on ICT to enhance service delivery and improve the ease of doing business, making Kenya the fastest-growing economy in Africa and the third fastest in the world according to recent ranking by Bloomberg. “For SMEs’ to register continued growth, we will expect you to develop, adopt and work with tested norms, high standards and be consistent,” he said.
He admitted that SMEs face a number of challenges that impede their growth and subsequent penetration into the regional, continental and international markets. These, he said, include challenges in quality and pricing; capacity to mass produce hence inability to maximise on economies of scale, which when set in the global context, creates a huge disadvantage leading to SMEs’ low survival rates.
PS Korir called upon SMEs to seek out export opportunities through the Export Promotion Council (EPC) and the Micro and Small Enterprise Authority (MSEA). He announced that the Government was facilitating SMEs to ensure that exports and jobs from the sector doubled in the next three years.
He acknowledged that lack of access to finance was a severe constraint to SMEs due to the high cost establishing their credit worthiness by banks. Subsequently, he said, this had hampered their growth and graduation to bigger companies which could create more jobs. (Teresia Yulu)