Grapevine

Why most small businesses face stunted growth

Poor capital investment among micro small and medium enterprises (MSMEs) and their reluctance to do business with the government are among the reasons that stunt their growth.

The latest Kenya Economic Report (KER) published by a State-backed think tank also revealed that MSMEs do not trade with larger corporations whose scale is larger hence more profits.

Additionally, these businesses operate largely informally without any contractual arrangement which has been noted to cause instability in their operations.

The report by the Kenya Institute for Public Policy Research and Analysis (Kippra) notes that these small businesses are key to the economy, especially in the wholesale and retail sectors, and their role in facilitating operations in larger corporations.

The study underscores the importance of these enterprises in President William Ruto’s Bottom-up Economic Transformational Agenda (BETA).