To state the obvious, SMEs are integral to Kenya’s economy. They account for 24% of the country’s gross domestic product (GDP), over 90% of private-sector enterprises, and 93% of the total labour force in the economy.
How strategic partnerships are making Kenyan SMEs stronger
Micro and small enterprises (MSEs) make a substantial contribution to livelihoods and inclusive growth in Kenya.
In terms of the number of enterprises, SMEs are crucial to economic growth for Kenya, yet they have continued to be bedeviled by challenges that hinder their growth and development.
Most prominent amongst these challenges is access to finance, the World Bank says this is the second most cited obstacle facing SMEs to grow their businesses in emerging markets and developing countries.
Because SME owners often have difficulty obtaining loans from large banks, they rather resort to bootstrapping: using their savings, or soft loans from family and friends to keep the business afloat.
While this would help in the short term, for there to be sustainable growth, SMEs require access to finance to properly innovate solutions that result in business success.
One of the important changes that would positively affect SMEs is improving credit infrastructure which helps SMEs get improved access to finance.
While microfinance institutions like Letshego have considerably focused on solving this problem by creating credit facilities specifically targeting SMEs, there Letshego is working on strengthening SMEs by offering a platform for collaboration with people of similar interests, with the hope that the strategic partnerships fostered here would create stronger businesses.
The thinking behind this is solid, for African SMEs to favorably compete in the global economy they need to adjust their strategies. Partnerships and collaboration empower these SMEs to leverage the advantages they have while strengthening their weaknesses.
This environment of collaboration is what the LetsGo Nation platform affords entrepreneurs, helping them find kindred spirits across different interests, passions and countries. So the Cocoa Farmer in Ghana can easily find the Chocolate manufacturer in Botswana or the music producer from Uganda can find the guitarist from Nigeria.
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