According to the Ministry of Industrialization, Trade, and Enterprise Development, there are approximately 7.4 million MSMEs in Kenya.
The small businesses in Kenya account for roughly a third (24 percent) of the country’s GDP: though impressive, that contribution is far lower than, for example, that of South Africa at 55 percent, indicating there is still an opportunity to grow the sector.
Additionally, according to the Ministry’s report, MSMEs employ around 93 percent of the country’s total labor force, just upward of 14 million persons.
Notably, a survey conducted by KNBS (2016) on MSMEs indicated that the three main reasons MSME owners gave for starting a business were better income (23.4 percent), preference for self-employment (20.5 percent), and having the requisite skills (17 percent).
Despite the impact that MSMEs have on the country in terms of creating employment opportunities, they still face numerous challenges. For instance, SMEs were severely affected by the pandemic as many businesses closed while others struggled to sustain themselves.
The 2020 World Bank Business Pulse Survey on Socioeconomic Impacts of COVID-19 in Kenya on Firms indicated that about 93 percent of firms experienced a decline in sales compared to the same period of the previous year.
Close to 65 percent of firms experienced a decline in demand, cash flow, and available finance. This is an example of the uncertainty that SMEs are exposed to.
Other risks that can hinder business operations for SMEs within and without Kenya include property damage, liability claims, and employee injuries.
While some business owners may believe that insurance is an unnecessary expense, the truth is that the cost of not having insurance is much higher.
Without adequate insurance coverage, SMEs may struggle to recover from losses and could even be forced to close their doors permanently.
It is on this premise that Minet in partnership with Fidelity Insurance, mooted the BiznaSure proposition, a tailor-made solution for the needs of the Kenyan entrepreneur, whether you are starting out in business or running a bigger outfit.
The solution is unique in a way that it offers more value than just financial solutions as you will see during the product presentation, including ease of access through digital distribution channels.