Central Bank of Kenya Governor Patrick Njoroge on Thursday, May 28, announced that 75% of Kenya's Micro, Small and Medium Enterprises (MSMEs) face closure the next 30 days.
According to data from the Kenya Association of Manufacturers (KAM), there are about 7.41 million MSMEs in Kenya, only 1.56 million are licensed whereas 5.85 million are unlicensed, this translates to at least 5 million small firms staring at potential closure.
Speaking during a virtual press conference, Governor Njoroge gave an update on the status of the economy and announced that something needs to be done to ensure the survival of Kenya's MSMEs.
"Three-quarters of MSMEs, according to a survey, would be in a critical state by the end of June.
"Whatever policy action is put in place to help MSMEs needs to go beyond finance, into ‘finance plus’, including linkages to other markets," he stated.
Kenya’s MSMEs contribute an estimated 40% of the GDP with the majority falling in the informal sector, often dubbed as the lifeblood of the economy.
These companies that employ an estimated 14 million Kenyans are defined by the government as businesses that engage between 1-99 employees.
A survey by the Kenya National Bureau of Statistics (KNBS) released early this year shows that approximately 400,000 micro, small and medium enterprises do not live to mark their second year anniversary.
It was not all doom and gloom though, as Governor Njoroge announced that the economy was on a steady trajectory.
"The Kenyan economy grew by 5.4% in 2019. We are expecting the data for Quarter 1 (Q1) 2020, but leading indicators show that the quarter was relatively strong.
"The indicators for April are mixed but the forecast for economic growth in 2020 remains as announced," he stated.
