Strengthening Trade and Business Planning among Women-Led Micro Enterprises in Kisumu County
By Simeon Ogonda
Today, we are confronted by the reality that very small businesses that form the backbone of rural and peri-urban livelihoods are failing. According to the 2018 Small and Medium-sized Enterprises (SME) Finance Survey Report, informal businesses account for 98% of businesses in Kenya, contribute to 30% of jobs in the Kenyan economy, and 3% of the country’s GDP. However, 46% of these businesses close within a year of founding. These very small businesses have little support from the policy implementation process and the business eco-system players such as banks, insurance companies, human resource professionals, and professional associations such as legal associations who virtually bypass them because of their low capacity to use these services. In Kisumu County, this challenge is exacerbated by the fact that most of these businesses are involved in cross-border trade with Uganda and Tanzania through the Busia and Sirare border points, respectively. Cross-border trade comes with very limited protections for the cross-border traders as the lack of knowledge of important regulations has virtually turned most of these traders into “smugglers” and leaves their businesses in the non-formal state for years. As a business consultant, community organizer, and social entrepreneur, I believe there is a solution to this problem. The solution lies in finding a link between consultancy and very small businesses.
In June 2019, I participated in the Alumni Thematic International Exchange Seminar (Alumni TIES) in Accra, Ghana. The theme of the seminar, “Strengthening Business and Trade for Women Entrepreneurs in Africa,” inspired a project that supports 30 women-led micro-enterprises in Kisumu County funded by a small grant through the U.S. Department of State. The primary goals of this project were to develop the business acumen of 30 women-led businesses through educating Micro-, Small, and Medium-sized Enterprises (MSMEs) on cross-border trading protocols of the Common Market for East and Central Africa (COMESA) and the East African Community (EAC) and through an incubation program that would last six months through consultancy and cross-border trading advisory services. A one-week intensive training was also held on technical and non-technical business operations principles and values.
In our fourth month of execution, the project has successfully engaged businesses that were handling cross-border products as well as those who undertook the arduous journey of bringing goods across the border into Kenya. Through the training and the monthly consultancy advisories as well as regular check-ins on their operations and our ongoing serialization of their businesses, we were able to document their journey, offer valuable advice, and improve their capacity to succeed in their businesses. Our focus has narrowed as we work to strengthen their understanding of their business ecosystem, a transformation of their book keeping practices, an understanding of the customer experience practices, digital marketing practices, the influence of human resources, and their knowledge of the legal processes of the business ecosystem and networking aspects of business learning. Thus far, we have successfully crafted a partnership between the very small enterprises and local consultants who have expertise in these subject areas in order to strengthen their systems and enable them to focus on the long-term profitability of their enterprises.
This project has also inspired the beginning of a new chapter in strengthening very small businesses. In order to reach greater numbers utilizing a sustainable format, we have now embarked on post project activities. These include developing a platform through which very small businesses would be able to collectively access a consultant to offer them these services. For instance, 20 businesses would be able to spend as low as $5 each to receive customer experience services for a period of six months through this platform. In addition, we are concluding a partnership between Millennial Legacy Foundation and Ng’ara Ng’ara, a mobile banking facility designed specifically for small traders to offer them financial support at competitive rates so that they can obtain extra credit for their businesses. We have also managed to work with Google trainers to help these businesses sign-up for “Google My Business” and start having a strong online presence within the county.
One of the most enduring lessons of this project that I have come to realize is that very small businesses have the capacity and potential to succeed like any other business if they receive proper business support to strengthen their systems. I believe these project activities have strengthened the position of these women enterprises in Kisumu and that scaling this solution will potentially reduce the number of businesses that fold within the first year of operation. While government support in creating a positive business environment perseveres, it is important to begin supporting these cross-border trade processes that could lead to success stories that would inspire more enterprises to grow, empowering many rural and peri-urban communities.
The Strengthening Trade and Business Planning among Women-Led Micro Enterprises is funded through an Alumni TIES small grant from the U.S. Department of State.