SMEs in Kenya are looking to hire and push for growth

KPMG and Business Daily have conducted a survey among small and medium enterprises (SMEs) across Kenya, which revealed that the business segment is leaning towards more hiring in the near future. Nearly 80% of SMEs plan to hire more professionals imminently, which represents an increase from last year. 

The duo surveyed 186 SMEs across Kenya to gauge sentiment in the segment, which has had its share of challenges in recent years. As the economy has progressed, a number of international businesses have flooded the Kenyan market, and the SME sector has found it hard to tackle the competition.

The segment has also suffered from a considerable funding deficit. A study from earlier this year revealed that 46% of Kenyan SMEs close down within a year of being established. The figure is particularly concerning when pitted against the fact that SMEs contribute 30% of Kenya’s GDP.

KPMG has been among the most active firms in supporting entrepreneurs and SMEs in the country. The Big Four accounting and advisory firm organised the Kenya SME contest in collaboration with Business Daily in July this year, which invited entries for the Top 100 SMEs in the country.

The duo have shortlisted the top 100 from 186 entries, and have used the information gathered in the surveys to obtain a general idea about sentiment among SMEs. Where 68% of the SMEs surveyed last year indicated that they were likely or very likely to hire in the near future, the figure has jumped to 77% this year.

According to Business Daily, the lack of funding available for SMEs is also likely to be rectified soon, in light of policy changes. The legal limit on interest rates has been removed this November, which is likely to incentivise lending among banks to SMEs, ensuring more liquidity in the segment.

“They have high confidence in economic outlook going forward and significant level of confidence in growth prospects within their respective industries. What this tells us is that there’s consistency when they are planning for growth and are investing in technology, and that’s what you want to see in the disruptive economy we are operating in,” said Benson Ndung’u, KPMG East Africa Chief Executive.