Online safety and steep costs of equipment are among the top factors hindering Kenya's Micro, Small and Medium Enterprises (MSMEs) from shifting operations to the digital space, a new survey shows.
The Digital Economy MSME Report released by the Centre for International Private Enterprise (CIPE) on Thursday says 27 per cent of businesses cited cyber security while 11 per cent singled out costs which include commission payments, transaction charges, delivery charges as well as internet expenditures.
According to the report, other factors that inhibit digitisation for small firms are competition from peers, insufficient employee digital skills and lack of awareness of the benefits of using technology in business.
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“Cybersecurity risk has been predominant during the post-Covid period due to the increased uptake of digital tools for payment and procurement of goods. The cost implication and awareness creation about cybersecurity make it difficult for MSMEs to fight against cyber threats,” reads the report.
Of the 1,280 businesses that responded to the survey, 32 per cent stated digital training as a necessary support for them to go online while 23 per cent cited awareness campaigns.
Other incentives were free website domains, technical assistance and financing.
According to the Kenya Bureau of Statistics, there are 7.41 million MSMEs in the country that collectively employ over 14.1 million people.
This accounts for 90 per cent of the total private sector enterprises and 93 per cent of the country’s labour force.
The businesses in the sector contribute 24 per cent of Kenya’s gross domestic product (GDP).
E-commerce, which refers to shifting business operations online, relies on enhanced interconnectivity of networks and the interoperability of new-age platforms in all sectors of the economy to offer convergent services.