PS State Department of Micro, Small and Medium Enterprises Development, Susan Mang’eni says Kenya is reforming its MSME sector to reduce business failures and boost growth through funding, mentorship and policy changes.
She highlights the Nyota programme’s unique “hand-holding” approach and efforts to create a supportive ecosystem, noting that most businesses struggle due to harsh conditions and limited market access.
Speaking on Thursday during a Radio Generation interview, she said many businesses collapse despite strong ideas due to challenging conditions.
“Most businesses that start up have good businesses, very high mortality,” she said, attributing this partly to a harsh business environment.
She added that the government is seeking to ease these pressures by implementing reforms that go beyond taxation and regulation.
“We try as much as possible to relax the environment so that these businesses, once they’re launched, they can gain,” she said.
According to the PS, the business environment is influenced not only by government policy but also by private sector practices, cultural factors and access to information.
“Business environment is also inclusive of the private sector, how are the various market forces playing out?” she said, adding that “all this constitutes that complex business environment.”
She emphasised the need to build a coordinated ecosystem involving both public and private actors.
“We need to create then synergies across so that we build an ecosystem that is supportive,” she said, noting that small and large enterprises depend on each other for growth.
“If the small businesses thrive equally, the larger businesses also will thrive,” she added.
The PS also highlighted challenges faced by small businesses in accessing markets, particularly when dealing with larger firms.
“Is it easy if I’m a smaller business, to do business with a large enterprise?” she asked, pointing to structural barriers within the private sector.
She said the government’s broader strategy includes expanding access to affordable credit, supporting market linkages and investing in shared infrastructure.
“We committed to unlocking access to affordable credit,” she said, citing initiatives such as the Hustler Fund and the Nyota project.
She described access to markets as one of the most critical factors for business survival.
“The biggest factor is market. Is the market available? Can I create a market?” she said.
The PS noted that micro, small and medium enterprises make up the majority of businesses in Kenya.
“98% of all our businesses are MSMEs,” she said, adding that “54% of them are agricultural.”
However, she pointed out a gap in the growth of medium-sized enterprises, which are key to job creation.
“The medium percentage is so small and it is at the medium size level where most jobs are created,” she said, describing the situation as a missing middle.
To address this, the government is focusing on helping businesses scale up and become more competitive.
A key component of this strategy is the Nyota programme, which she described as a “job creation pipeline” designed to support young people through two pathways.
“The first pathway is enhancing youth employability,” she said, explaining that it focuses on skills development and exposure to work environments.
The programme also recognises informal skills acquired outside formal education systems.
“We came up with a policy of recognition of prior skills that you have which you never acquired in a formal education system,” she said.
Through institutions such as the National Industrial Training Authority and technical training centres, these skills are assessed and certified.
“The certificate enables them now to come out and compete professionally,” she said.
The second pathway focuses on entrepreneurship, targeting young people entering business for the first time.
Central to this approach is mentorship and ongoing support, often referred to as “hand holding,” which she said distinguishes the programme from other funds.
