Kenya marks world’s small enterprises day amid gloom cast by the pandemic

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COVID-19

Majeville Macua is perched on a seat inside her boutique about 8 km away from Nairobi, the capital of Kenya, and peers through a window every so often as if to win customers to her premises.

Obviously, the pandemic has caused a litany of challenges to all facets of our lives.

Micro-, Small and Medium-sized Enterprises (MSMEs) Day is celebrated every year on June 27. Macua, however, seems worried. She sells imported ladies’ apparel, shoes, and bags, a profitable business she had been doing for more than ten years until last year when the pandemic cast a gloom over her venture.

“I was not making money the months after COVID-19 was identified in the country. It was tough. I slashed my employees’ salaries from 12,000 shillings (about 111 U.S. dollars) to 74.20 dollars. One left, leaving me with one,” explained Macua.

The MSMEs experienced the wrath of the pandemic. The MSMEs sector is generally known for its inability to absorb financial shocks caused by an unforeseeable crisis, such as the spreading of a disease. As the world marks the MSMEs Day Sunday, its actors reflect on the travail caused by the pandemic and their path to recovery.

A report on MSMEs in Kenya adopted the definition of MSMEs as those that have below 100 employees. The mapping exercise put the number of MSMEs at 7.41 million constituting both informal and formal.

These businesses are recognized in Kenya for giving birth to innovations, providing employment to vulnerable members of the society such as the disabled, women, and those shunned by big corporations due to one reason or the other. To that effect, they remain crucial to the economy.

Macua said that the first immediate change to her business was not able to travel for sourcing her wares in Turkey. “What happens is that I video call sellers I have a trade history with and from there they have people fit the clothes for me to select,” Macua told Xinhua in a recent interview. To keep her enterprise going, she has abandoned shipping shoes as they have become less attractive to customers due to the pricing.

As she pushes on in yet another year under restrictive measures to keep the virus at bay, she implores the government to inject more money back into the economy to enable her and many other entrepreneurs to provide employment opportunities to more Kenyans.

The government last year in partnership with local lenders rolled out a guarantee scheme to absorb some collateral for MSMEs after it realized that close to 70 percent of small businesses risked closure due to the impact of the pandemic. The uptake among informal sectors, however, has been modest due to the absence of information and tough terms attached to the loans.

“I do not know of the existence of such facilitation from the banks. First, the process of applying for bank loans is convoluted. By the time your loan is approved and processed you might as well just pull the plug on the business,” said Jonas Mramba, who is involved in the large-scale distribution of second-hand and new beddings. He is not keen to take loans from lenders and prefers to tap into his savings in case of unprecedented expenses.

The entertainment industry, which fails to fall under the category of essential service providers to be exempted from containment measures, continues to reel from the impact of the restrictive measures.

“The drinking culture has changed for sure. People are now streaming into wines and spirits joints that are not affected by the 7:p.m closure requirement. Competing with that has been a grave challenge,” said a club owner who did not wish to be identified.

Inside his club, domiciled outside Nairobi’s central business district, are three patrons sitting among an assembly of empty chairs nursing beers. They exchange low murmurs while a lone waitress dusts off tables.

While conceding he does not have the financial muscle to make changes to meet immediate customer demands such as home deliveries and integration of food services as has been done by neighboring clubs, the club owner hopes the economic impact of the coronavirus will soon see an end.

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