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Kenya: Firms in Kenya Less Able to Scale Up Despite Increased Listings – World Bank

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4 years ago

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Nairobi — Firms in Kenya are less able to scale up despite the increased creation of new firms, World Bank has said highlighting a trend where many firms fail to pick up after launch.

The findings by the bank mirror a previous survey by the Kenya National Bureau of Statistics which revealed that almost 400,000 micro, small and medium enterprises (MSMEs) did not see their second anniversary in the last five years.

In its report dubbed from recovery to better jobs, World Bank attributed the weak entrepreneurship to shortcomings in the physical capital and infrastructure in addition to challenges in access to finance and the regulatory framework.

Other hindrances listed by the bank include poor internet across some regions, poor knowledge capital which affects quality research and poor management quality.

“Despite high levels of firm creation, firms in Kenya appear less able to scale up. Kenya has fewer people accessing the internet compared to peers and a smaller share of graduates in science and engineering. There is also a striking gap between Kenya and its leading peers on knowledge capital. On-demand factors, Kenyan entrepreneurs face an internal market that is smaller than other middle income countries (MICs),” World Bank said.

The report highlighted that the services sector is the key driver of job creation in Kenya, a grim picture for a country that seeks to grow like other developing countries in the Middle East which mainly depend on manufacturing.