SMEs in Kenya Stand to Gain from Adopting Customized ICT solutions

By David Indeje / June 30, 2016




Lack of capital, cash flow management and inability to market products and services are some of key challenges faced by Small and Medium Enterprises (SMEs)  in Kenya.

This is according to a survey carried out by Safaricom Business on 181,000 businesses spread across 21 counties.

Supplementing the survey, the Ready Business Index test taken by 1,200 SMEs places the level of ICT adoption by businesses in the country at a score of 54 out of 100.

Firms in IT and communication, those in the import and export industry as well as businesses offering professional services lead in adoption of technology, while those in the wholesale and retail sector, businesses in the hospitality industry and agribusiness firms are on the lower side.

Launched 2 weeks ago, the Ready Business Index is a simple test designed to help businesses understand whether they are fully taking advantage of technology in their business processes.

Read: Kenyan Banks Must Review Lending Terms to SMES to Spur Needed Growth

“Kenya’s economy data shows SMEs make up 99 percent of businesses in Kenya, employing 75% of the total labour force, yet contribute only 18% to our Gross Domestic Product. Safaricom Business has therefore developed the Ready Business platform to help improve the productivity of these firms by enabling staff work more efficiently and the business meets their unique customer needs,” said Rita Okuthe, Director, Safaricom Business.

72 percent of respondents on the Ready Business Index are small enterprises with less than 5 employees, with majority of the respondents operating in the services, IT and communication, wholesale and retail, transport and logistics, and hospitality sectors.

Read: Safaricom Rolls out New Business Solution for SMEs

46 percent of businesses have deployed Lipa Na M-PESA and other cashless payment services, especially those in hospitality, energy and retail sectors. Firms operating in the agribusiness, import/export and media industries exhibit low uptake of cashless payments.

Only 37 percent of respondents had deployed websites, with those in the financial sector, IT and communication and service sectors having comparatively higher deployment rates. Firms in wholesale and retail, hospitality and agribusiness sectors have low web presence, with only 2% of agribusiness firms having any web presence.

43 percent of firms have adopted organizational email, with deployment fairly similar across many sectors, but notably low in the public sector, agribusiness and wholesale and retail.

Opportunities SMEs are looking at include diversification of revenue streams, low priced and scalable business solutions, access to adequate skills and technology, better access to customers and better access to information.

Read: Delayed Payments to Kenyan SMEs to Be a Thing of the Past

“Adoption of ICT solutions enables businesses become more efficient and creates more opportunities for them such as by plugging revenue leakages, increasing revenue opportunities through online presence or by providing better insight by way of data relating to their customers. Talking to SMEs, we have seen that while there are existing technology solutions in these areas, many are still struggling to find solutions that fit into their business environments. The Ready Business Platform is designed to specifically provide solutions is such situations,” said Rita.

 



About David Indeje

David Indeje is a writer and editor, with interests on how technology is changing journalism, government, Health, and Gender Development stories are his passion. Follow on Twitter @David_IndejeDavid can be reached on: (020) 528 0222 / Email: [email protected]

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