Micro and Small Business Kenya

Most Kenyans affectionately refer to the micro and business sector as ‘kale kabiz kamine’, ‘my biz’, ‘hustle tu yangu’, ‘nikutafuta maziwa na mkate kwa biashara’. All over the country people have a business they are running to contribute to their household budgets. So the sector is actually defined as: Microenterprise - employs less than ten people and has an annual turnover that is not more than Kshs 500,000. The owner is the manager of the business with family or friends being recruited as employees. Small enterprise - employs between ten and fifty people and has an annual turnover of between Kshs 500,000 and Kshs 5 Million. The owner can be the manager and there can be part-owners as well in this sector which, has acquired a small share of the market. Both micro and small enterprises refer to the manufacturing, farming, trade and service sectors. They operate in informal settings such as hawking, home baking and formal settings with a determined office. Importance to the Economy The sector employs most Kenyans at 6.5 million persons which accounts for roughly 80% of people in employment. It contributes 20% of the Gross Domestic Product and provides goods and services. It is the key driver to innovation and competition. The enterprise culture creates and facilitates private sector development. Ironically the significant and positive role played by the sector is undermined by many constraints that deny it the full potential required to succeed. Sources Kilonzo, D. (2006). “Barriers affecting the growth and development of micro and small enterprises in Kenya”. Masters Dissertation. University of Northampton, United Kingdom. The Micro and Small Enterprises Act (2012). Kenya Gazzette Supplement. The Government Printer, Nairobi.