A typical micro, small or medium enterprise in Kenya needs an average of Sh30,000 capital injection to restart operations after a closedown, pointing to the tiny monetary value of ventures running at that level.
The FinAccess Micro and Small Enterprises Tracker survey published by the Central Bank of Kenya (CBK) shows that the median capital required to reopen an SME remained unchanged between October last year and June.
The survey, however, revealed discrepancies between amounts needed by male-owned businesses from those needed by enterprises owned by females, showing that the former remained constant throughout the study period at Sh50,000 while the latter reduced to Sh21,000 in June down from Sh30,000 last October.
“For closed businesses to re-open, 32.7 percent of respondents would need between Sh20,001 to 50,000; 16.1 percent would need between Sh10,001 to 20,000 and 16.6 percent would need above Sh100,000.
Majority of female-owned businesses (32.6 percent) and male-owned businesses (32.9 percent) would need between Sh20,001 to Sh50,000 to reopen,” reads the report in part.
“However, more female-owned enterprises would need less than Sh20,000 to start again than male-owned businesses. On the other hand, 33.3, 30.7 and 33.9 percent of the youth aged 18-25, 26-35 and above 36 years, respectively would need between Sh20,001 to Sh50,000 to start operating again.”
The survey also found that business owners operating in urban settings require more capital of Sh50,000 this year compared to the median of Sh40,000 recorded last year, while the figure for their rural counterparts stagnated at Sh30,000 over the period under review.
The report indicates that a majority of the closed businesses said they would utilise their savings to reopen.
This group was closely trailed by those relying on government grants, coming ahead of owners who would look up to family and friends for non-repayable assistance.
Other cited sources of funds to reopen closed businesses included loans from self-help groups, loans from friends and family, personal business loans from banks and the sale of assets in that order of priority.
On market perception, respondents who expect their businesses to do better in the next 12 months declined to 50.6 percent down from 58.3 percent last year, while the proportion of those expecting their performance to worsen increased to 27.3 percent, up from 22.6 percent last October.
