Is there hope for businesses in Kenya during this Covid-19 pandemic? Do Kenyan businesses have what it takes to navigate through the pandemic? What is the way forward? What should SMEs do differently to avoid being swept away by Covid-19?
It is not clear how many SMEs have closed shop in Kenya at the moment. Before Covid-19 came calling, at least 1,000 of them were kicking the bucket on a daily basis. The numbers can be more than double with the ongoing pandemic.
Almost 90 percent of African small businesses fear they may not survive the Covid-19 crisis, and need access to practical tools and support to prevent financial loss, according to a recent survey of entrepreneurs by the African Management Institute (AMI).
87 percent of the SMEs are worried about surviving the current crisis, while 67 percent of those surveyed said business had been hit hard since the introduction of social distancing, lockdowns, and curfews on the continent.
The government has been trying to put in place measures that are aimed at cushioning SMEs during this time. Some of the measures included setting aside at least 3 billion shillings for helping out small businesses as well as reducing the Value Added Tax (VAT) from 16 to 14 percent.
Kenyan banks, through Kenya Bankers Association (KBA), agreed to help out SMEs and individuals through the restructuring of loans. So far, a total of 360 billion shillings worth of loans have been restructured by the Kenyan banks.
Kenya Bankers Association, being aware of the challenges that businesses are going through, has been conducting online mentorship training through its Inuka SME platform. The mentorship includes chats on Twitter and one-on-one interactions with various experts on Inuka SME Chat sessions.
“There are so many challenges that SMEs in this country are going through right now. Various experts have failed to capture the reality by hiding behind economic technical terms that end up confusing the very people they should be helping,” said Mr. Francis Waithaka, the CEO and Founder of Digital4Africa.
What are some of the strategies that businesses can adopt to sail through?
This is not the time to sit in a shop and wait for customers. Customers are busy looking for sellers online. Go online.
Have a budget
Have a plan for your business. Times are hard but you need to tell the difference between your personal finances and those running your business.
Talk to your bank
In the event that your loan is due but you are not in a position to start repaying, talk to your bank. They will understand and agree with you on the payment model that will be beneficial for both of you.