SMEs advised to work with digital hubs


Kenya National Chamber of Commerce and Industry (KNCCI) President Richard Ngatia makes his remarks during the opening ceremony of the 4th Edition of the SMEs Conference and Expo held at the KICC grounds on March 15, 2023. PHOTO | FRANCIS NDERITU | NMG

Small and medium-sized enterprises (SMEs) have been encouraged to collaborate with digital hubs across the country to adopt technologies that can boost their growth.

The Kenya National Chamber of Commerce and Industry (KNCCI) president Richard Ngatia said such linkages will support innovations by the youth and spur business growth for SMEs.

“Such collaborations can potentially transform critical value chains in Kenya driving productivity, efficiency and competitiveness by creating market linkages and supply efficiencies that can help to unlock the full potential of this sector,” he told a forum for SMEs convened by the Nation Media Group (NMG).

There are around 10 tech hubs in Kenya, including iHub, Nailab, Swahilipot Hub, Eldo Hub Innovation Centre, LakeHub, Nairobi Garage and Gearbox.

A digital hub is a shared workspace for a range of complementary activities, including commercial businesses, the public sector as well as community organisations.

The three-day SME conference and exposition organised in partnership with the KNCCI attracted 15,000 participants, which is more than double the 6,000 it attracted in 2020 when it was first run.

NMG chief executive officer Stephen Gitagama noted the exhibition offers the SMEs an opportunity to showcase their products, network, expand markets and innovate.

“The growing number of participants highlights the importance and the significance of this conference to the SME sector and the country at large,” he told the forum at the Kenyatta International Convention Centre (KICC).

This year’s conference marks its fourth edition and is themed around accelerating growth by the adoption of technology and innovation.

Two new features have been included in this year’s conference including the Kenya MSME Square and County Pavilions.

The Kenya MSME Square will create visibility for businesses and open them up to new markets while the County Pavilions will give businesses opportunities to interact with their respective governments to resolve issues, make enquiries and build relationships with relevant stakeholders.

Last year’s event focused on the resilience and recovery of SMEs at a time the sector was starting its recovery from the effects of the Covid pandemic.

Small businesses were hit hardest by the coronavirus disease leading to job layoffs, salary cuts and closures due to dwindling revenue streams.

Each year, the NMG also runs the Top 100 SMEs competition that helps showcase Kenya's fast-growing mid-sized firms running sustainable businesses, targeted at helping them attract funding and opportunities.

Mr Gitagama noted findings from the Top100 SMEs survey shows 50 percent of enterprises allocated between 11 and 50 percent of their revenue to digital transformation and another 70 percent allocated 50 percent of their revenues to digital transformation.

“That tells you that digital transformation is the area where most of our organisations are putting in the effort. Fifty-seven percent of the companies said that 25 percent of their (sales) growth was due to innovation,” he said.

Kenya National Federation of JuaKali Associations chief executive Richard Muteti said SMEs require tech-backed homegrown solutions and access to affordable raw materials in order to make quality products and compete effectively.

At the peak of the Covid pandemic, businesses like restaurants, bars and retail stores were struggling with a decline in customer demand, repayment of bank loans, and rent and utility bills fueling worries of a spike in non-performing loans.

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