The slowdown in economic growth has emerged as a common denominator among key challenges faced by businesses. This was highlighted at the SMEs Conference and Expo that took place Nairobi.
The two-day exhibition, convened by the Nation Media Group (NMG) #ticker:NMG and the Kenya National Chamber of Commerce and Industry (KNCCI), with more than 80 SMEs in attendance ended yesterday with many SMEs saying they were feeling the pinch of a distressed economy.
Isaac Kimani, general manager at Gilchery Skip-Trace Limited, an end-to-end debt collection and management SME, said the tough economic times was the biggest challenge his firm was facing. The economy is expected to grow at 5.7 percent in 2020/21 financial year.
“Right now the changing economic times are biting us the hardest. When you even look at banks, some of them are struggling, which while it means more business for us, they can’t readily pay us because the cash simply is not there,” says Mr Kimani.
SMEs, he says, are not yet fully aware of the importance of prudent debt collection and management yet it is critical in the operation of a business as it enables a smooth cash flow. There is need, he adds, to educate and engage more SMEs on debt collection.
Dennis Kiama, project manager at Willstone Homes, which has been building affordable homes for the last two years, says uptake of houses has been relatively slow. This despite the government making housing a key pillar in its development agenda, through which it has promised to build 500,000 units every year.
“Uptake of homes has been slower than we projected due to a below par economic growth. However, we are looking at venturing into new areas like Ongata Rongai which will enable us to expand our projects,” says Mr Kiama.
Meanwhile, many startups have been embracing and utilising the digital base to expand their businesses, banking on its flexibility.
Lucy Mathenge, a business development manager at QED Solutions, which specialises in software development for niche businesses, says the digital revolution has seen their business grow in leaps and bounds after a tough start as more people embrace advanced technology.
“The nature of our business really helps us to reach diverse markets easily due to the increasingly quick uptake of technology. As such, while there are some challenges, we project more people especially small businesses embracing the efficiency of technology,” says Ms Mathenge.
The stagnating economy, she says, is not lost on them as its spillover effects are visible with payments delays and slow uptake by new clientele.
Other challenges include high operation costs, limited capital, difficulty in accessing credit, corruption, infrastructural and logistics bottlenecks among others.
Interior Cabinet Secretary Fred Matiang’i said his ministry is working on buying over 100 goods directly from local manufacturers to boost SMEs.
“We have also been looking at public procurement and disposal law to ensure that we can provide an opportunity to ring-fence procurement by government from local service providers,” Dr Matiang’i said at the just-concluded conference.