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Why Innovation is Important for Small & Medium Enterprises

BY Soko Directory Team · June 3, 2016 05:06 am

Kenya has recognized the Small and Medium Enterprises (SMEs) as boosters of its economy and they constitute a major source of employment and generate significant domestic and export earnings for the country.

The 2016 Kenyan National Bureau of Statics (KNBS) Economic survey, “The economy generated a total of 841.6 thousand jobs of which 128.0 thousand jobs were in the modern sector while 713.6 thousand were in the informal sector, during the period under review.”

However, the enterprise faces a myriad of challenges. Key among them: Financing, hiring and retention, management, sales and marketing among others.

According to Francis Waithaka, “The cost of credit, as opposed to access to credit, is by far the biggest financing challenge facing SMEs in Kenya.”

With this recognition, the government has set in place initiatives to ensure they are catered for.  One the, Micro and Small Enterprises Act No. 55 Of 2012  That provides for the promotion, development and regulation of micro and small enterprises; and the establishment of the Micro and Small Enterprises Authority, and for connected purposes.

Two, the standardization of the cost for company registration to KES 10,000 has by the ministry of industrialization to improve the business climate for small and medium enterprises (SME’s) that want to invest and do business in Kenya.

Samuel Kimani, Jamii Bora Bank Chief Executive Officer in enhancing innovation within the enterprise, he calls for innovations. This was handled through a Twitter online conversation #InnovationInSMEs .

Key among the areas a business needs to address: Competition, planning, goals and sales.

He says, “Innovation can be a catalyst for the growth and success of your business, and help you to adapt and grow in the market place. It means changing business model and adapting to changes in your environment to deliver better products or services. It is a new idea or product; more so a new way of doing things that makes processes more efficient.”

How do you innovate?

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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