The number of online businesses and Kenyans operating their businesses from home reduced in June 2023, dropping to 17.8% compared to the 19.1% recorded in October 2022, the FinAccess Micro and Small Enterprises Tracker Survey for August 2023 released by the Central Bank of Kenya (CBK) shows.
According to the survey, the number of people running their businesses in open markets and those without official business premises, like hawkers, increased to 29.3% from 26.6% during the period under review.
Similarly, the number of businesses operating in commercial premises, such as offices and industrial sites, increased to 31.8%, up from the 30.1% recorded in October 2022.
“The location where a business operates influences its growth. Commercial premises and hawking are the main premises from which the business reported from,” the report read in part.
CBK's survey further indicated a decline in the number of Jua Kali sheds, market stalls, and kiosks, which decreased to 21.1% from the 24.2% recorded in October 2022.
Digitization
The report also shows that the proportion of MSEs that use digital channels increased during the period under review.
According to the report's findings, the number of MSEs using at least one digital channel in business transactions increased from 73.5 per cent in October 2022 to 85.6 per cent in June 2023.
The report findings revealed that digitalization rates were notably higher among businesses owned by women, located in urban areas, and operated by their owners, in comparison to businesses owned by men, situated in rural areas, and with 1-9 employees.
Additionally, the report highlighted that within different age groups, respondents between 18-25 years old exhibited a greater tendency to utilize digital channels compared to other age brackets.
The survey results further indicated that the predominant mode of transaction with MSMEs for most customers continues to be cash.
According to the report, cash accounted for a significant 98.5 percent of transactions.
The government in its Finance Act 2023 proposals, imposed a five per cent tax on online content creators, which experts say could lead to further reduction of online businesses in Kenya.
