SME SECTOR

The Kenya SME Sector Case Study

The Gross Domestic Product (GDP) in Kenya was worth 55.24 billion US dollars in 2013. The gross domestic product (GDP) is equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time. Small and Medium enterprises (SMEs), contribute about 45 per cent of Kenya’s GDP. The SME sector also employs about 85 percent of the Kenyan workforce. According to Kenya’s Vision 2030, SMEs will be a major driver of social development and youth employment, as well as a key lever in the enhancement of the country’s global competitiveness.

Kenya is mainly an imports economy with the country’s top sources of goods from India, China and the United States. The country has maintained a negative balance of trade over the past years. The imports in 2014 are likely to have gone past the 15-billion-dollar mark as exports stand at about 6 billion dollars. Analysts note that the faster rise in imports amid drop in exports has shrunk the country’s foreign exchange reserves, contributing to the weakening of the Kenya Shilling against the dollar. Kenya needs to increase her exports to enhance the country’s global competitiveness. For this to happen, Kenya needs to promote SMEs as exporters of both locally made and imported goods especially within the African region. The SME growth is assessed by SME contribution to the three main sectors of the economy; manufacturing, services and agriculture.

In the financial services, lending to SMEs constituted 23.4 per cent of the industry loan book as at the end of 2013. As at December 2013, banks had loaned the small and medium sized businesses Sh332 billion up from Sh225 billion in 2011 and Sh133 billion in 2009.

Banks have, however, identified the sector as key to their growth and are setting up departments to specifically serve SMEs. Their concentration has, however, been on long-term loans that can be backed by assets neglecting the area of working capital.

Against the above background, OPENWORLD in partnership with SME industry thought leaders and stakeholders will be hosting the fast annual SME expo to enhance the following objectives and deliverables as a contribution to promoting the growth of the SME industry in Kenya and Africa.

 

The objectives of the SME Expo are

• Expose SME owners to real insights into the market
• Give SMEs an opportunity to learn best practices in business management and growth
• Expose SMEs to reach audience with a distinct interest in the market and their products
• Have SMEs create awareness and develop relationship with new prospects
• Enable SMEs to determine and stimulate needs of customers via face to face interactions and product demonstrations
• Gathering competitive intelligence by business
• Give interested SMEs a platform to launch and introduce a new product into the market

• Enable manufacturers and manufacturer agents to recruit dealers or distributors of their products from across the country and region
• Enable SMEs to connects with manufacturers and manufacturer agents to be recruited as dealers or distributors of their products
• Give customers an opportunity to apprise the exhibiting companies of their service requirements and specific problems that they may be having with their
• Enable SMEs to multiply revenues by booking orders from

 

SME Expo expected Outcomes/future plan

• Revenue growth for participating businesses
• New dealer and distributor trade partnerships
• Best managed businesses
• Major SME sector boost
• An annual platform dedicated to SMEs industry networking for business and sharing of best practices

 

Attend SME EXPO 2016