Ask anyone running a business in Kenya and they’ll tell you, biashara
is not for the faint-hearted. One day, you’re making sales, customers are
smiling, and money is flowing. The next, maandamano, a small fire, theft, or
even a hospital bill, can wipe you out just like that.
Currently, there are approximately 7.4 million SMEs in Kenya, according to the Kenya National Bureau of Statistics. These businesses are the true engines of our economy, providing jobs for nearly 80% of Kenyans and contributing nearly 40% of our GDP. Whether it's a small shop in Kariobangi, a tour company in Watamu, or a juice parlour in Kisumu, it’s these enterprises that keep Kenya moving.
But behind all the hustle and grind, most SMEs are living dangerously close to disaster. No insurance, no safety nets. One small problem, be it a health scare or a cyber-attack, and the whole thing can come crashing down. And we’re not just guessing here. During COVID, small businesses took serious blows. According to a World Bank report, almost two-thirds had to either lay off people or shut down temporarily. Some never came back.
Despite all that, insurance uptake among SMEs remains dismally low. By 2023, insurance penetration in Kenya was just 2.3% of GDP. Health insurance? Worse. Only 19% of Kenyans had any form of medical cover, and after NHIF transitioned into SHIF, many SMEs were left scratching their heads, wondering what was next.
The sad reality is that when employees fall sick, they either dig deep
into their already stretched salaries to pay for treatment or, worse, they just
soldier on without proper care. Productivity drops, stress levels rise, and
businesses suffer quietly.
But here’s where things are starting to get a little interesting. A few clever SMEs are adapting. A 2023 study by the Association of Kenya Insurers (AKI) found that about two-thirds of SMEs are now taking risk seriously.
They're buying proper insurance covers, not just fire and theft, but also for business interruption, stock loss, and even equipment breakdown. Some insurance companies are now tailoring products to fit small businesses, allowing flexible monthly payments depending on your sales cycle. So, if January is a dry month for your shop, you don't have to kill yourself trying to pay hefty premiums.
When it comes to employee health, the revolution is even sweeter. Some
insurers have packages that cover outpatient, maternity, mental health, and
chronic illnesses, even if you only have three workers. Imagine the difference
when your staff know that if they fall sick, they won't have to beg or borrow
to see a doctor. Happy employees = loyal employees = better business. Simple
maths.
And because this is Kenya, where everything is going digital faster than you can say "M-Pesa," getting insurance has never been easier. You can now sign up, pay, and even get your claims sorted all through your phone. Some startups are even bundling insurance into mobile wallets and payroll systems. No drama, no endless forms, no trips to town.
The sharp SMEs are also taking it a step further. They are planning for bad days. Things like supplier failures, cyber attacks, or even what happens if the business owner suddenly needs to step back. It’s not paranoia, it’s wisdom. And guess what? Banks and investors love businesses that think ahead. You want that loan? You want that investor’s money? Better show them you’re not building your business on vibes alone.
Kenya’s economy is shifting again, with new health coverage systems, new pension ideas, and new taxes. If you’re an SME owner, this is not the time to gamble with your hustle. Insurance and employee health cover are no longer luxuries for big corporations. They are the basics for survival.
Don’t wait for disaster to humble you. Protect your business. Protect your team. In Kenya today, resilience is the real currency, and trust me, it’s worth way more than a flashy logo or a nice office.
The writer is the CEO & Principal Officer Britam General Insurance
