Kenya’s private sector has long been celebrated as the heartbeat of the economy. It continues to power jobs and investment even in tough times.
Yet beneath the resilience lies a difficult truth: growth has not been equally shared. Many businesses, especially SMEs, remain exposed to shifting market conditions and unpredictable policies.
Kenya’s economy grew by 4.7 per cent in 2024, supported largely by strong performance in agriculture, fintech and mobile money. According to the African Development Bank’s 2025 Kenya Country Focus Report, inflation eased from 7.7 per cent in 2022 to 4.5 per cent in 2024, helped by better food supply, a 16 per cent strengthening of the shilling and lower global oil prices.
However, access to affordable credit remains a challenge. The 2024 KEPSA SME Policy Index Report indicates that private sector credit growth fell to four per cent by June 2024, from 13.9 per cent the previous year, as businesses struggled to borrow under tighter monetary policy.
To keep growth on track, Kenya needs policy stability and predictability. Businesses thrive where rules are clear and consistent. The next wave of progress will come not from more regulation, but from better, simpler enforcement of existing ones.
Kenya’s reputation as the “Silicon Savannah” continues to shine. According to Ken Research (2024), the country’s mobile money and fintech ecosystem is now valued at more than $2 billion. Fintech innovations are helping firms become more efficient and resilient than before.
Still, digital finance has its pitfalls. The 2024 FinAccess Household Survey found that 16.6 per cent of borrowers defaulted on their loans, up from 10.7 per cent in 2021.
SMEs are Kenya’s real growth engine, though many remain stuck in informality. This limits their access to credit, government programmes and large contracts. Initiatives like the Credit Guarantee Scheme and digitised business registration are helping, but many entrepreneurs are still not aware of them.
Unlocking SME potential requires strong links with corporates through supplier development, mentorship and content policies that genuinely empower Kenyan firms.
Kenya’s next chapter depends on how well its businesses adapt to a fast-changing international economy. The shift towards renewable energy, sustainable manufacturing and ESG-aligned investment is no longer a side agenda.
The foundations for sustained growth of the private sector are already in motion. However, these strengths will only deliver their promise if matched with coordinated action. Policymakers must prioritise stability and smarter regulation, financial institutions need to widen access to affordable credit and corporates should deepen partnerships that help SMEs scale.
Mwelu is the General Manager of Business Development at Jubilee Asset Management and Kano is PhD Doctoral Fellow at Strathmore University.
