Small and Medium Enterprises (SMEs) account for 90 percent of the businesses at the global level1 and are critical in employment creation, production of output for final consumption and input for further production resulting to economic growth. In Kenya, SMEs contribution to the Gross Domestic Product (GDP) is estimated at 40%2. Further, SMEs constitute 98 percent of businesses in the country and have an annual job creation of 30 percent of all new jobs3.
In terms of gender, 31.4 percent of the SMEs in Kenya are female owned, 48 percent male owned and 17% co-owned by both men and women4. Women own 61% of the unlicensed SMEs whereas only 6.4% of unlicensed SMEs are owned by men an indication that they could be struggling with meeting these regulatory requirements which may be unfavourable to them. Women-led SMEs in Kenya also face the challenge of raising startup capital due to lack collateral requirements by banks and other financial institutions5.
In addition, they may also be lacking the requisite entrepreneurial skills to successfully run the SMEs. Despite several interventions by the government and non-governmental organisations to address the challenges facing women-led SMEs in the country, the impacts of the COVID-19 pandemic may have aggravated the gender gaps among SMEs and weakened the slow progress toward gender equality in SME performance in the country6. To address some of the challenges faced by women-led SMEs in Kenya, Oxfam and Open Capital Investments with the funding support other local partners are implementing the Impact Small and Medium Enterprise (SME) Development project in Kenya targeting women-owned impact-driven SMEs.
The project focus is to provide Business Development Services (BDS) to 75-100 impact SMEs in the next 5 years, through direct training and mentorship support; providing access to finance by giving tailored investment readiness support and helping them raise capital, and fostering an enabling environment for women-led impact SMEs through network strengthening and policy advocacy. It is against this background that Oxfam commissioned an analysis of institutional and government small and medium enterprises-related policies in Kenya with an aim of generating evidence to inform the implementation of the third pillar of the project; fostering an enabling environment for women-led impact SMEs through networks strengthening and policy advocacy.