Jica-backed training drive aims to improve SME operations

Kelvin Kahugu sells a collection of products ranging from sportswear, shoes, movies, and wallpapers. [File, Standard]

Access to finance remains a major barrier hindering growth for small businesses, this is despite the pivotal role it plays in creating employment in the country.

Kenya’s micro, small, and medium enterprises (MSMEs) sector employs approximately over 15 million people, contributing nearly 30 per cent to the country’s gross domestic product.

Sector players and other stakeholders are making effort to eliminate trade barriers facing small-scale businesses and push them to scale.

To alleviate these challenges and fast-track industrial development, Kenya Institute of Business Training (KIBT) and the Japan International Cooperation Agency (JICA) have partnered to improve the efficiency and sustainability of Kenyan MSMEs through training.

According to JICA’s representative in Kenya Shinkawa Makoto, the partnership has resulted in tangible outcomes. “Revenue has increased, unemployment has reduced by over 10 per cent and, most importantly, we have trained more than 100 consultants who are now capable of guiding businesses to improve their operations and management,” he said yesterday at a seminar in Nairobi to enhance enterprise competitiveness.

A recent World Bank report has highlighted a critical financing deficit of over Sh2.6 trillion within the MSME sector.

It has also shown that the financing gap is widening as funding from mainstream financial institutions continues to decline, largely due to the high-risk profile of these businesses. KIBT project coordinator Gideon Njogu said changing the mindset of entrepreneurs was a focus of the training.

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“Initially, many MSMEs were family-run with a mindset that saw business as a personal endeavour. Today, we have empowered entrepreneurs to view their businesses as ventures that require professional management and strategic thinking,” he said.

This shift has helped businesses reduce inefficiencies, improve quality, and become more competitive, not only within Kenya but in regional and global markets.

“We are working to remove stringent lending conditions that have historically made it difficult for MSMEs to secure loans,” said KIBT deputy director Patrick Nyakundi.

The government plans to expand the MSME development model to all counties by 2030.