Importance of Access To Business Skills and Knowledge For SMEs

The small medium enterprise (SME) sector plays a very crucial role in Kenya’s economy. Stats show that the sector contributes more than 40 percent of Kenya’s gross domestic product (GDP).

One major contributor of the SME sector to the economy of Kenya is the creation of employment opportunities. In a country where the unemployment rate stands at 39.1 percent, the SME sector employs more than 86 percent of Kenyans.

Despite the SME sector being that important, the numerous challenges facing it are threatening to choke it to death. Stats show that at least 400,000 SMEs are closing shop annually. This translates to around 33,333 SMEs closing down monthly and at least 1,000 daily.

Among the challenges the SME sector faces in Kenya, is inadequate or no funding at all. The SMEs have to struggle to find funding for their business. The implementation of the interest capping law, meant to give small businesses a reprieve, just made the matters worse. Lenders refrained from lending to the SME across the country.

The recent taxes by the government outlined in the Finance Act 2018 are set to choke the SME sector even further.  The truth is, many SMEs do not know how to operate and survive at these difficult times. With taxes to pay, bills to foot and families to take care of, most have had no choice but to close down.

READ: Why SMEs in Kenya Hold The Future

Although many people will dispute what am about to say, I think the main challenge of the SME sector in Kenya is not funding but inadequate or total lack of access to business skills and knowledge. I realized this when I attended one of the SMEs in conversation tour that had been organized by Barclays Bank Kenya in Nyeri a while ago.

During the conversation with experts from Barclays, many SMEs realized that what they actually need was information, skills and knowledge. A person without skills and knowledge, even if given funding, he or she will still fail but being equipped with skills and the knowledge about the business and the field and the business is the best way to grow.

READ: Challenges Facing SMEs in Meru and Why Barclays Bank Kenya Came At The Right Time

Most SMEs have inadequate information on how to access markets for their products and services, the right people to approach (connections) in the field, modes of getting funding and who to approach for funding among others.

Having access to business skills and knowledge will help SMEs identify the challenges, know solutions to challenges, identify markets and how to access them as well as how to fund and grow their businesses.

Barclays Bank Kenya is in Eldoret, Boma Inn Hotel, (Thursday) for the SME in conversation tour. It is time to learn and be wise in doing business in Kenya.