The government is committed to supporting Micro, Small and Medium Enterprises (MSMEs) in the country and helping them to thrive, Cabinet Secretary (CS), Cooperatives and Micro, Small and Medium Enterprises (MSMEs) Development; Fellow Certified Public Accountant (FCPA) Wycliffe Ambetsa Oparanya has said.
He said MSMEs are the backbone of Kenya’s economy, contributing over 40 percent of our GDP and creating the majority of employment opportunities across the country, but despite this contribution, many remain informal, undercapitalised and constrained in their ability to grow.
Consequently, Dr Oparanya advised the MSMEs in the country to formalise their existence, noting that this will give them access to funding and other benefits which will help them to develop.
Speaking during the 4th Micro, Small and Medium Enterprises (MSMEs) Connect event in Kisumu, on Friday, the CS noted that growth must begin with structured and intentional support and his ministry has established a clear and deliberate growth pathway for MSMEs. The three-day event brought together various MSMEs from around the country to interact and showcase their products.
“For micro enterprises, our focus is on financial inclusion, formalisation, business skills development and market readiness. Through the Hustler Fund, millions of entrepreneurs are accessing affordable credit, building credit histories and gaining the confidence to expand their ventures,” he said.
Oparanya stated that to enable the transition from micro to small enterprises, the government is strengthening mentorship, business development services and access to shared infrastructure and the revitalisation of Constituency Industrial Development Centres (CIDCs) and the establishment of County Aggregation and Industrial Parks will provide modern equipment, production spaces and value chain support to enable enterprises to enhance quality, boost productivity and compete effectively.
He added that the government is also embracing the green economy as a key driver of sustainable MSME growth. Climate resilience, renewable energy, sustainable agriculture, waste management adding that eco-friendly manufacturing must define the future of enterprise.
“MSMEs are central to this transition, and we are creating incentives, partnerships and financing mechanisms that enable them to adopt sustainable technologies and access emerging green markets locally, regionally and globally.”
The CS also emphasised that the government is also helping MSMEs to access markets for their wares which has been a major constrain affecting their growth.
“As Chair of the Africa Ministerial Cooperative Conference (AMCCO), I remain committed to strengthening regional trade and deepening the cooperative movement across Africa. Our focus is firmly aligned with the African Continental Free Trade Area (AfCFTA), which provides MSMEs with access to a market of over 1.3 billion people,” the CS stated.
To this end, he challenged the Kenyan enterprises to look beyond borders and seize opportunities not only in the East African region but across the continent and the global marketplace.
Oparanya noted that it’s in this regard that Kenya continues to champion the removal of non-tariff barriers and the simplification of trade systems to unlock seamless cross-border trade. Through AfCFTA, our MSMEs can integrate into continental value chains, expand exports and transform from local players into global competitors.
“We are also strengthening partnerships with international institutions such as the International Trade Centre (ITC). Following my recent engagement with its Executive Director, Ms Pamela Coke-Hamilton, we are aligning ITC programmes with Kenya’s MSME agenda and establishment of the ITC office in Nairobi marks a major milestone that will enhance access to global expertise, technology, innovation and international market linkages, especially for women, youth, creative industries and sports-based enterprises.
He further challenged MSMEs to embrace technology in order to grow faster, reach wider markets and improve efficiency. Oparanya told the gathering that in this regard, the government is investing in platforms such as MSME Connect, e-Citizen integration and digital payment ecosystems to ensure MSMEs operate within a supportive, tech-enabled environment that promotes growth, transparency and accountability.
The CS also called for deliberate collaboration between government and MSMEs and other stakeholders such as financial institutions noting that government alone cannot achieve the transformation required in the MSME sector.
“Financial institutions must rethink risk models, private sector players must open value chains, development partners must align interventions, and county governments must provide enabling environments. Together, we must modernize Africa’s private sector and position our MSMEs to compete on a continental and global scale.”
In this regard, he urged all stakeholders to work with the Government to build an ecosystem where every entrepreneur has access to finance, markets, technology, skills and a supportive policy framework. Let us raise the bar for MSMEs and position Kenya as a regional and continental hub for competitive, innovative and sustainable enterprise.
Kisumu governor Prof. Peter Anyang’ Nyong’o on his part said Kisumu County has taken deliberate and strategic steps in creating an enabling environment for MSMEs to thrive.
He said capacity building is one of the initiatives the county has taken to help the MSMEs to grow.
Across Kisumu today, mentorship programmes, technical workshops, and sector-specific trainings are equipping our MSMEs with the knowledge, skills, and networks necessary to navigate an increasingly dynamic business environment,” Nyong’o stated.
The county has also come up with policies to help the MSME such as Buy Kisumu, Build Kisumu Policy which is a localised adaptation of the national Buy Kenya, Build Kenya strategy which seeks to enhance the competitiveness, visibility, and consumption of goods and services produced within our county.
The governor further said they have enacted Kisumu County Trade and Markets Policy which promotes a vibrant, inclusive, and efficient trade ecosystem. Through this policy, we aim to improve market access, increase employment opportunities, support MSMEs, and entrench transparency and accountability in all trade-related activities.
“Our Cooperative Policy is revitalising the cooperative movement while also supporting community groups and self-help organisations to transition into more formal, sustainable, and structured cooperative business models. We believe that cooperatives are key pillars of shared prosperity.”
Nyong’o revealed that the county is already implementing the Entrepreneurship Clinics Programme which is a unique platform where MSMEs, county officials, national agencies, and private sector actors sit together to identify challenges and design practical, actionable solutions.
“These clinics have proved invaluable in enhancing business stability, nurturing innovation, and strengthening MSME competitiveness,”
The governor emphasised the role of MSMEs as drivers of the economy, creating jobs for our youth, sparking innovation, supporting families, and driving the very engine of both our county’s and our nation’s economic growth.
Kenya churns over one million youths into the labour market every year where the government only absorbs a mere 200,000.
The country is a youthful nation with more than 16 million people not in any form of employment, spiking up poverty levels.
Data from World Bank shows over 3.4 million young people below the age of 35 are not engaged in any form of employment, as our institutions of higher learning churn out over a million youths to the job market every year.
Data from the International Labour Organization (ILO) shows that unemployment rate in Kenya decreased to 5.40 percent in 2024 from 5.60 percent in 2023. Unemployment rate in Kenya averaged 12.5% in 2023. Over the years, the Kenyan government has repeatedly emphasised its commitment to stemming unemployment through initiatives like the Hustler Fund, youth enterprise loans, and improved policies for small traders.
These interventions, the government says, are meant to uplift ordinary citizens striving to make a living through informal businesses.
A report released by the Ministry of Cooperatives and MSMEs Development shows that MSMEs power over 80 per cent of Kenya’s workforce and contribute nearly 40 per cent of the country’s GDP yet many still face challenges accessing affordable credit.
They employ approximately 15 million people in Kenya, which is about 85 per cent of the non-farm workforce. According to the 2016 MSME Survey, there were over 7.4 million MSMEs in the country, with the unlicensed segment contributing more than half of the total employment.
A significant portion of this employment comes from unlicensed businesses, which are estimated to account for 57.8 per cent of MSME jobs.
By Mabel Keya Shikuku and Milton Onyango
