Managing Your Entire Business At A Lower Cost And On A Global Scale

The Kenya National Bureau of Statistics (KNBS) estimates that at least 450,000 small businesses collapse annually in Kenya.

To put that into perspective, that’s about 30,000 monthly or 1,000 daily businesses shutting their doors. These sobering numbers should shake us to the core and provoke serious reflection. What causes such a massive exodus of enterprises from Kenya’s economic stage?

One of the most significant challenges cited for this heartbreaking wave of business closures is the inability to access credit from commercial banks. This is often the case because many small and medium-sized enterprises (SMEs) struggle to maintain the kind of tangible and trustable financial records that banks require.

In a country where entrepreneurship is frequently lauded as the engine of growth and innovation, why is it that so many businesses are being starved of the very oxygen they need—capital?

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As Jason Kettmann, from Bizzyn, an innovative tech firm providing cloud accounting solutions to small and medium-sized businesses (SMBs), aptly puts it, “The biggest challenge for small businesses is access to capital.” His observation reveals the harsh truth: many small businesses in Kenya, about 97 percent, approach banks with nothing more than a notebook. Lacking formal records, these businesses are unlikely to be taken seriously by financial institutions. The result? Entrepreneurs are often forced to turn to high-interest alternatives like Fuliza, a mobile lending platform that, while convenient, often deepens financial burdens.

Imagine walking into a bank with a dream and a business idea, only to be turned away because your records are incomplete or scribbled in an old notebook. It’s disheartening, and it’s a reality that far too many Kenyan entrepreneurs face daily. Without formal accounting records, banks perceive these businesses as high-risk, thus denying them the capital injection they desperately need to grow.

But does it have to be this way? Kettmann believes otherwise, and his solution is deceptively simple yet transformative: cloud-based accounting and financial management software. With an easy-to-use accounting system, even the smallest business can provide accurate, formal financial records that make a compelling case to banks. “No Kenyan business, whether big or small, should be denied access to credit for lack of better accounted records,” Kettmann asserts. His belief taps into an underutilized potential—that with better technology, the playing field can be leveled.

Accounting software enables businesses to present real-time, accurate financial records, removing the guesswork for banks and allowing them to make quick, data-driven lending decisions. This would significantly reduce the reliance on costly informal credit sources. “With a more formal business via easy-to-use accounting software, they can send the relevant information to the banks, and they can make an immediate loan decision at less than 10% of the cost of alternatives like Fuliza,” Kettmann explains.

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What Kettmann is proposing goes beyond just balancing books; it’s about transforming how SMEs interact with the financial ecosystem. Access to capital shouldn’t be a luxury reserved for the few who can afford to hire accountants or those with access to sophisticated financial tools. Instead, it should be democratized, and technology is the key to making that possible.

“Bizzyn is here to help Kenyan businesses thrive. Our system is easy to integrate and can be used in any sphere that the business might want to seek funding or access to credit. Bizzyn aims to revolutionize businesses’ financial management, enabling them to make informed decisions and thrive in today’s business world,” he added.

Consider the long-term implications of this shift. If more small businesses adopt formal accounting practices through technology, we could see a profound change in the SME sector. The collapse of 1,000 businesses per day would become less common, and more businesses would survive beyond their infancy. Imagine the ripple effect on employment, innovation, and the economy as a whole.

At its core, the issue of small business collapse in Kenya is an issue of financial inclusion. By empowering businesses to keep trustable records using cloud technology, the doors to bank credit would swing open wider, allowing more entrepreneurs to access the resources they need to thrive. The time for change is now. We must embrace solutions that provide financial visibility and credibility for every small business across Kenya.

In an age where technology drives progress, it’s time for Kenya’s SMEs to get on board with tools that not only save their businesses but potentially help them flourish. After all, a more formal business is a more credible business, and a more credible business stands a fighting chance at surviving in Kenya’s competitive landscape.

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