•Kenya has a robust innovation ecosystem last year attracted the highest Investment Funding Volume to the tune of Sh107.6 m ($800,000).
•One notable aspect of the Kenyan MSME landscape is the significant participation of women, who account for 48 percent of MSME ownership.
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Potential for growth in Kenya's startup and SME sector lies in providing financial assistance and innovation support at the county level, the Association of Startups and SMEs Enablers of Kenya has said.
In their latest report, ASSEK says this support is crucial for remote entrepreneurs who face challenges accessing business support services typically available in major cities.
The report says that on average, Kenyan entrepreneurs earn between Sh10,000 to Sh30,000 per month.
ASSEK chief executive Mercy Kimalat said that support from a formalised entrepreneurship support system is key in taking Kenya to its next phase of growth.
Kenya has a robust innovation ecosystem last year attracted the highest Investment Funding Volume to the tune of Sh107.6 m ($800,000).
“Kenya’s innovation scene, which is ranked third in Africa with energy and environment sectors being the best performing industries, has room for further growth that will enable more startups to scale up creating new products while opening up more job opportunities," said Kimalat.
He added that the country should come up with programmes that improve access to affordable capital, digitisation, access to best fit talent as well as tradeoff of price and access to clientele, enablers and services.
One notable aspect of the Kenyan MSME landscape is the significant participation of women, who account for 48 per cent of MSME ownership.
This highlights the crucial role that women play in driving entrepreneurial activity and economic growth in the country.
Interestingly, only approximately 0.03 per cent of MSMEs are owned by Persons Living With Disabilities (PLWD), demonstrating the resilience and entrepreneurial spirit within this community.
However, some challenges need to be addressed, such as the 19.6 per cent of MSMEs that do not have bank accounts.
Access to financial services remains a critical issue for many entrepreneurs, impacting their ability to effectively grow and scale their businesses.
When it comes to capital investment, a majority of MSMEs (48.6 per cent) invest over Sh200,000, indicating a significant commitment to their ventures and a willingness to take risks to achieve success.
In terms of financing, 78.5 per cent of MSMEs have applied for loans, showing a strong demand for capital to support business expansion and operations.
However, 21.5 per cent did not apply for loans, possibly due to various factors such as concerns about debt or access to alternative sources of funding.
These upgrades would include offering digital services, grant funds, advising startups on pricing strategies, enhancing access to clientele, and establishing recognised physical locations.
Kimalat, emphasised the importance of formalised entrepreneurship support systems in propelling Kenya's growth.
Global Startup Ecosystem Index (GSEI) 2023 ranks Kenya's innovation ecosystem at position 62 globally and 3rd in Africa, after Mauritius and South Africa.