Challenges Small Businesses Face In Kenya

Kenya has many small businesses which are in fact a source of employment for many Kenyans and contribute to almost 90% of the GDP. Every business, large or small is bound to facing challenges such as hiring the right staff and brand building among others. However there are certain challenges that are specific to small businesses. These challenges make it hard for the small business to flourish.  Some businesses make it against all odds while others close up along the way. Before starting a business, it is good to be aware of the expected challenges so that you’re ready to fight through to the end.

Financial challenges;

This is a common struggle for many small businesses in Kenya. Financial institutions don’t always make it easy for small businesses to secure loans. In most cases, a small business dealing with primary and cheap products might not have security for the loans making it difficult for money lenders to give them loans. Other than finances to run the business, some business owners depend entirely on the income from the business for daily survival. The little they make is directed in buying the essential needs which might in the end lead to fall of the business.

Stiff competition;

It is agreeable that Kenyans are rich in great ideas but that applies to other nations as well. Let’s take an example of China, no matter how good Kenyan business ideas are, they always face competition from products coming from china. Another great challenge that triggers competition is lack of advancement in technology. We have the ideas but our country is still behind competing nations when it comes to technology.  This can be rectified by managing products coming from our business partners and also trying to keep up with technology.

Business education limitation;

Many people dealing with small businesses have no knowledge on finance and interests. You find that lack of such kind of important knowledge makes some people pocket their money instead of using it for investments. For a long time the government has failed the people by failing to provide support in terms of improving infrastructure such as road networks, storage facilities and reducing taxation rates. This is however changing as the government tries to create new job opportunities for the youth. Supporting the youth in small businesses is one measure to achieve this.

Increased number of hawkers;

There is nothing wrong with hawkers trying to find their daily bread, but the fact that they offer their products at relatively cheaper prices possess a challenge to small businesses. Hawkers are mobile and only aim at making little profits and get all their products gone. If there was any policy that can be set to manage prices, then small businesses would be in a position to compete against hawkers.



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