The financial sector of Kenya is one that has greatly expanded and the contribution of the small and medium size enterprises (SMEs) has had a huge role to play. SMEs consistently generate income, employment innovation and new technologies but year after year, some of them are still where they are, facing a period of growth stagnation.
According to a survey carried out by Safaricom Business on 181,000 businesses spread across 21 counties; lack of capital, cash flow management and inability to market products and services are some of key challenges faced by Small and Medium Enterprises in Kenya.
Supplementing the survey, the Ready Business Index test taken by 1,200 SMEs places the level of ICT adoption by businesses in the country at a score of 54 out of 100. Launched 2 weeks ago, the Ready Business Index is a simple test designed to help businesses understand whether they are fully taking advantage of technology in their business processes.
Speaking at an event in Nairobi, Director of Safaricom Business, Rita Okuthe said, “Kenya’s economy data shows SMEs make up 99% of businesses in Kenya, employing 75% of the total labor force, yet contribute only 18% to our Gross Domestic Product. Safaricom Business has therefore developed the Ready Business platform to help improve the productivity of these firms by enabling staff work more efficiently and the business meet their unique customer needs.”
In the survey carried out, the following data was collected:
- 72 percent of respondents on the Ready Business Index are small enterprises with less than 5 employees, with majority of the respondents operating in the services, IT and communication, wholesale and retail, transport and logistics, and hospitality sectors.
- 46% of businesses have deployed Lipa Na M-PESA and other cashless payment services, especially those in hospitality, and energy and retail sectors. Firms operating in the agribusiness, import/export and media industries exhibit low uptake of cashless payments.
- Only 37% of respondents had deployed websites, with those in the financial sector, IT and communication and service sectors having comparatively higher deployment rates. Firms in wholesale and retail, hospitality and agribusiness sectors have low web presence, with only 2% of agribusiness firms having any web presence.
- 43% of firms have adopted organizational email, with deployment fairly similar across many sectors, but notably low in the public sector, agribusiness and wholesale and retail.
- Opportunities SMEs are looking at include diversification of revenue streams, low priced and scalable business solutions, access to adequate skills and technology, better access to customers and better access to information.
“Adoption of ICT solutions enables businesses become more efficient and creates more opportunities for them such as by plugging revenue leakages, increasing revenue opportunities through online presence or by providing better insight by way of data relating to their customers. Talking to SMEs, we have seen that while there are existing technology solutions in these areas, many are still struggling to find solutions that fit into their business environments. The Ready Business Platform is designed to specifically provide solutions is such situations,” said Rita.
The Ready Business Index has been intricately designed to promote the use of technology in a diversely digital business world thus promoting the adoption of technology among SMEs to boost their growth, performance and profitability. If you haven’t already, you can take the ready business test here.