The annual Kenya Top 100 Mid-Sized Companies Awards were held in Nairobi on October 7, 2011. Jungle Macs, a Thika-based SME, won this year’s awards for adding value to cashew nuts, macadamia nuts and peanuts and then exporting them to the US, Europe and Asia. The SME awards began in 2008 and they have become a permanent tab on the local business calendar.
The benefits of these awards include:
- a platform for SMEs to prove that they play a fundamental role in the Kenyan economy by reducing unemployment that currently stands at 35%,
- in innovating new products and services because they are not stuck in bureaucratic wasteland
- in tax revenues for the government which has to budget for an extra 1 million people annually,
- in encouraging the youth to rid themselves of the white-collar employment mindset and consider entrepreneurship as a satisfying and rewarding journey and,
- in proving to banks that SMEs are worthy of receiving credit facilities and other banking privileges usually reserved for big corporates.
Despite this worthy recognition, Kenyan SMEs still experience challenges that slow down their march to becoming multinationals. Electricity supply is hydro electric, so when droughts reduce water levels in the 14 dams, Kenya Power introduces rationing and SMEs’ production is affected because they can’t afford expensive generators.
Government procurement tenders usually lock them out due to such rigid regulations such as high bid bonds, prior experience, tax compliance certificates and so on, though the recent decision to relax procurement rules for local furniture making SMEs to make it easier for them to bid for government tenders is commendable. For example, they are now exempt from presenting tax compliance certificates and bank statements for the last three years.
Higher education policy still favours university education in allocating resources, which has been worsened by the conversion of many polytechnics such as the Kenya Polytechnic into university constituent colleges. Most SMEs require technical skills that polytechnics excel in training, skills which can’t be delivered by the theory diet served by universities.
It will take an encyclopaedia to outline all the challenges Kenyan SMEs face. However, it’s gratifying to see that they are making do with what they have, thriving despite the odds and being acknowledged for their tenacity.
The next Pamoja Media blog will examine how the agricultural sector is using technology to help farmers earn more money from their produce and to mitigate the effects of climate change.
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