Government commits to support MSMEs to drive growth

By Patricia Kombo (PCO)

The Government is committed to support the micro, small, and medium enterprises (MSMEs) as the backbone of Kenya’s Bottom-Up Economic Agenda.

Speaking during the commemoration of the 9th MSMEs day last week, President William Ruto said the MSME sector is an engine of Kenya’s economic growth.

“So immense is the sector’s potential that it creates the largest number of jobs and generates earnings for our young people and women.

“We are, therefore, focused on unlocking its full capacity through modern infrastructure, progressive policies and access to affordable credit to accelerate inclusive and sustainable transformation’’ the president said.

He emphasized a value chain approach, the creation of MSME clusters, and a review of frameworks to ease business operations, re-affirming the government’s unwavering support for MSMEs.

President Ruto emphasized the urgent need for co-ordinated policy implementation across government agencies, youth-driven innovation and entrepreneurship programs and expansion of digital platforms to enhance service access and transparency.

He challenged the banking sector, particularly through the Kenya Bankers Association, to reduce lending interest rates to single digits, making credit more affordable for small and medium-sized enterprises.

Kenya’s MSME sector contributes over 40 per cent of the country’s GDP income and key source of employment, especially for women, young people, and vulnerable groups.

Speaking during the event, the Cabinet Secretary for Cooperatives and MSMEs Development Dr. Wycliffe Ambetsa Oparanya re-affirmed the government’s continued support to build the capacity of MSMEs to maximize the global trade opportunities including the AFCFTA framework, the economic partnership with European Union, the AGOA and other bilateral arrangements.

“In our efforts to expand the markets for our MSMEs beyond our borders, we shall be hosting the 25th EAC Trade fair in Nairobi in October this year which will bring together MSMEs from across the region offering an opportunity to our MSMEs to connect and expand their market access,’’ said Oparanya.

Oparanya further reiterated the need for greater synergy among government financing programs, such as Uwezo Fund, Women Enterprise Fund, and Youth Enterprise Fund. He emphasized the importance of creating a unified and accessible funding framework for MSMEs.

MSMEs and Development Principal Secretary Susan Mangeni emphasised the immense potential of the sector to bridge the employment crisis in the country.  

She said their size and flexibility help build strong, fair, and sustainable communities, yet many operate informally, which limits their access to funding, legal rights, and government support.

“Every year, one million youth enter the job market, yet only 200,000 secure formal employment. Of the 20 million in the workforce, only 3.5 million are formally employed. This translates to the support the MSMEs play in bridging the employment gap,” the PS said.

She said that the government is currently developing the MSME Policy 2025, a strategic roadmap to support a productive, diversified, and competitive MSME.

The policy, Ms Mangeni said, seeks strengthening the institutional and regulatory frameworks, streamline regulatory processes, and enhance access to finance, markets, and technology.

“On the digital superhighway, the government has onboarded over 20,000 government services on the e-Citizen platform, allowing entrepreneurs to register businesses, apply for licenses and access credit from a basic mobile phone. This is not just about convenience, it’s about reducing costs, saving time, and increasing access,” Mangeni added.

She said this year’s trade fair will give an ideal platform for promoting diversified Kenyan brands, testing newly created technologies, and improving Kenya's business in the neighbouring countries as part of the enlarged East Africa Community trading bloc.

The PS added that the 2024 National MSMEs Survey is currently underway, the first since 2016.

The survey aims to capture the dynamic nature of the MSME sector by examining enterprise activities, geographic distribution, gender, and skill levels.

It will quantify the sector’s contribution to the GDP, employment, and economic inclusion both in the formal and informal sectors.

It will also cover non-primary activities and agribusiness.