“Globally family businesses contribute to 70% of GDP and help economies to create jobs. Kenya has a long way to go. We would like our SMEs in Kenya and Africa to grow their entreprises into intergenerational businesses,” says Joram Mwinamo, CEO SNDBX
NAIROBI, Kenya, 29-30th May – The SNDBX, a one stop centre for SMEs, hosted the third edition of the Big Baraza, SME conference organised by SME Entrepreneurs in Kenya.
The 2- day premium event 2023 event themed Cracking the Code: Building for Growth addressed the challenges faced by SMEs and focused on SMEs taking control of their destinies, creating structures for sustainable growth, investing in innovations and finding alternative sources of financing. The conference offered business owners practical lessons on building generational businesses while withstanding environmental shocks and managing their civic duties.
Kenya National Bureau of Statistics (KNBS) indicates that about 400,000 SMEs close shop annually across Kenya, with 46 % of them folding within the first year of establishment. Those SMEs which shut down especially in the first five years, attribute it to making losses, poor investment choices and market saturation.
National Economic Survey report by Central Bank of Kenya (CBK) indicates that MSMEs constitute 98% of all businesses in Kenya and create 30% of the jobs annually as well as contributing 3% of GDP growth.
According to the KNBS 2022 Economic survey in 2022 the informal sector created 702.9 thousand new jobs constituting 86.1 percent of all new jobs created outside small-scale agriculture and pastoralists activities (KNBS 2022 Economic survey).
Speaking at the Big Baraza, Mr. James Mureu, Board Chairman of Micro and Small Enterprises Authority (MSEA) said “SMEs are the backbone of the economy but they face a high mortality rate due to many challenges. SMEs in Kenya have been resilient despite these challenges. Let’s keep hope alive as this country will be saved by micro and small enterprises.
In this regard the government is committed to ensure that the Sector is incorporated in the global trade agenda. Through the Hussler Fund, the government as at 29th May, 2023 had disbursed Kshs.29,695,876,449 billion with a total repayment of Kshs.19,562,775,164. With a savings of 1,485,284,586 and had 7,022,555 repeat customers. Hustler Fund has enabled the MSME players to break the shackles of predatory lending and rebuild their credit history and celebrate a new beginning of financial inclusivity,” said Mureu.
Despite the significant support SMEs offer to Kenya’s socio economic development; they face a high mortality rate of over 70 percent underpinned on a challenging regulatory environment, capacity challenges, access to market challenges, investment in unsustainable sector of wholesale-retail (that’s highly susceptible to systemic shocks) and low adoption of technology among others. Further Kenya faces a growing challenge of unemployment with over 900,000 youth entering the labour market annually.
CEO of SNDBX, Mr Joram Mwinamo says, “SNDBX was born to offer support to enable SMEs get past the five-year mark. Themed Cracking the Code, we are challenging SMEs to aspire to build multi-generational businesses that outlive the founders and sustain good financial health through the generations. We realised that despite their enormous potential, many Kenyan businesses fail to live beyond their founders or at their best do not go beyond the third generation.
SMEs in Kenya are still reeling from the external shock of Covid 19 pandemic, 2022 elections and effects of the Ukrainian war which has increased production costs causing reduced revenues. However, according to SME Strategist Director, Mr Kiirinya Kithinji of WYLDE International, SMEs were still failing or facing challenges long before these external shocks showed up in the operating environments with increased production costs. SMEs fall into operational trouble due to management failures such as poor financial management, excessive speculation, inability to articulate clear value propositions and market needs and a failure to establish effective client acquisition and retention processes.
With regards to SMEs developing multi-generational businesses, “Globally family businesses contribute to 70% of GDP and help economies to create jobs, Kenya has a long way to go. We would like our SMEs in Kenya and Africa to grow their business and one day become members of Henokiens Association which requires its members to have been in operation for at least 200 years with the founding family running it or being the majority shareholder. The company should also sustain good financial health with at least one family member still actively involved in company management or serving on the Board of Directors,” explains Mwinamo.
Speaking at the conference, Group CEO of AAR, Dr Patrick Gatonga encouraged SMEs to keep innovating and improving their products. “Never stop innovating. Remember that is how you started. Develop ideas quickly into tangible initiatives. Test quickly, it’s ok if you fail, keep learning from every experiment, keep thinking and most importantly, doing!
The 2023 Big Baraza event attracted speakers and panelists ranging from Government bodies, Regulators such as KRA and KEBS, industry stakeholders representing SME support organisations included MSEA, SME Founders Association and KEPSA and was sponsored by Absa, Kenya Airways, Safaricom Sacco, AAR Insurance, Zono, CPF, iPay amongst others. The SME representative shared various experiences on building businesses that are primed for growth and will include speakers drawn from a cross section of private and public sectors, regulators such as Kenya Bureau of Standards, Energy and Petroleum Regulatory Authority (EPRA).
More about SNDBX
Developed over 10 years of working with entrepreneurs. The SNDBX brings together a permanent residency of more than 30 professional disciplines under the same roof to work collaboratively side by side with entrepreneurs physically and virtually.
The SNDBX delivers sustainable business models localized for the African ecosystem
For more information visit www.sndbx.ke
For more information please contact
Mary Gitari I Brand Spark PR IT : 0722 224 972 I E: Mary.gitari@brandspark.co.ke
Catherine Kabaki I Marketing Manager, SNDBX I E:karibu@bigbaraza.co.ke
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L-R – Victor Agolla, Nairobi County Chief Officer, Dr. Henry Chakava, Chairman East African Educational Publishers (EAEP), Dr Prashnah Shah, CEO Onestop Enterprise and Mr James Mureu, Board Chairman MSEA and Joram Mwinamo, CEO of SNDBX during the Big Baraza SME Conference by SMEs. The 2023 event held on 29th and 30th May 2023 was themed Cracking the Code: Building for Growth and aimed at equipping SMEs to build intergenerational businesses in Africa.
L-R – Joram Mwinamo, CEO SNDBX, Dr Mbithe Anzaya and Dr Patrick Gatonga, Group Chief Executive Officer of AAR during a press conference at the Big Baraza SME Conference by SMEs. The 2023 event held on 29th and 30th May was themed Cracking the Code: Building for Growth aimed at equipping SMEs to build intergenerational businesses in Africa.
Additional Quotes
- SNDBX Board Chair Philip Odera – “Unstable and chaotic businesses have no hope for future growth. For a multigenerational business to succeed, set the governance structure in place when you come in, not when leaving the business.”
- CEO Melvin Tea Flora Mutahi – “Entrepreneurship is about problem solving. If you don’t enjoy solving problems as an entrepreneur then go home. Otherwise, find a niche and become proficient in it. Know your product and service, Know the market and Know your environment. In addition, you must innovate or die and it is always better to get a business coach and mentor. As your business grows, pull others with you.”
- Kenya Airways, CEO Allan Kilavuka – “Airlines are possibly the most difficult business you can ever get into. Big corporates are looking for ideas in sustainability that can come for SMEs. Don’t cold sell to a big corporation, that email will not be read. Don’t sell your product, instead emphasize on having a unique selling proposition that solves a business problem.”
- Onestop Enterprise, CEO Dr Prashnah Shah – “Involve children and next generation in your business. Dinner time with the children involves how we solved some of the business problems we encountered. They get to work in the business and have to rise through the ranks. They can pursue their own careers but still have roles in the business