IT IS DO OR DIE FOR MSMEs

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Many students burn the mid night oil while revising before sitting for examinations. This is because passing examinations is viewed as a ticket to high paying jobs in the formal sector. The allure to occupy big offices, drive expensive cars and reside in leafy suburbs makes scoring of top grades in national examinations a life and death affair. Often, the end result is disillusioning because only a few of those who graduate from universities and tertiary colleges are able to secure formal jobs. There is also a big number of learners who do not pursue education beyond the primary and secondary school levels. Ultimately, this has made unemployment (especially among the youth) a big nightmare in Kenya.

In order to make ends meet, majority of those unable to access formal jobs opt to set up micro businesses. You will find them hawking merchandise in the busy streets of our urban centres, polishing shoes, running kiosks on road sides or selling foodstuff in the open air markets. Such individuals are categorized as necessity entrepreneurs. They are not entrepreneurs out of choice and they are ready to abandon their ventures should a better opportunity arise. This is in contrast to opportunity entrepreneurs who get into business voluntarily. The latter category spot and seize opportunities in the market and in the process, they are able to set up growth oriented enterprises. Given their long term view of the market, opportunity entrepreneurs are more successful than opportunity ones.

Be it as it may, micro, small and medium enterprises (MSMEs) whether established by opportunity or necessity entrepreneurs account for 80% of the total employment in Kenya and 28% of the Gross Domestic Product (GDP). On average, micro enterprises have less than ten employees, small enterprises engage ten to forty nine employees, while medium sized enterprises have fifty to ninety nine employees.

MSMEs have been hit hard by the Covid-19 pandemic. Given the requirement to maintain social distancing, the number of customers visiting these businesses has gone down drastically. Others have been unable to access goods since they rely on importation and overseas trips have been restricted. In the midst of these challenges, a number of MSMEs that were doing well before the onset of the pandemic have been forced to close shop. The net effect of this difficult operating environment among MSMEs has been loss of jobs, inability to service loans from banks and other financial institutions and a slowdown in the economy.

Clearly, this poses a very big challenge to the government. As it continues to look for ways and means of navigating the turbulent times, the government has an onerous task of giving due consideration to the MSMEs. It is a do or die matter.

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