Expectations high as plans to rescue SMEs underway

Tuesday, June 2nd, 2020 00:00 |
A fishmonger at Burma Market, Nairobi, waits for customers on Madaraka Day yesterday. Small businesses have been affected by Covid-19, leading to reduced sales and total closures. Photo/PD/Kenna CLAUDE

George Kebaso @MoraraK

Mama Otis, who is among a group of women frying fish at Dagoretti Corner in Nairobi, is looking forward, more than ever, for things to normalise after the new reality  brought about by the coronavirus pandemic. 

From selling 150 pieces of fish per day before the Covid-19 hit the country to just a mere 10 in two months, she has degenerated into a life of squalor, only scouring for a meal for survival.

She arranged for her six children to be taken back to her rural home so that she can fend for herself. 

Besides shrinking supply of fish, merry-go-round financing opportunities and credit facilities also broke down, leaving her at the mercy of concerned relatives. These ones too, could not keep up with her financial needs. 

“I have literally become a beggar. I am not alone. We are about 10 of us here. We did well.

We paid for our children’s education and domestic needs, but now we don’t even know what will happen if schools re-open soon.

I urge the government to come to the rescue of these hustler women,” Mama Otis told People Daily.

Programme unveiling

However, when she heard over the weekend that a group of industrialists under the Kenya National Chamber of Commerce and Industry (KNCCI) had come together to put in place strategies to revitalise Small and Medium Enterprises (SMEs), Mama Otis was elated. 

“I can’t wait to see my business back on its feet,” she said. 

On Friday, industry players kicked off a series of meetings to figure out the post Covid-19 business environment for SMEs, a group hard hit by social distancing protocol. 

 KNCCI President Richard Ngatia disclosed that the Chamber had inked a deal with the German Government Development agency (GIZ) to offer between Sh10 million and Sh200 million to businesses via a Public Private Partnership programme. 

“This programme will be unveiled next week to enable SMEs access soft loans to jumpstart their business ventures,” he said during a virtual meeting titled Navigating Business through the Impact of Covid-19 hosted by KNCCI at its head office in Nairobi. 

The sector that contributes 33.8 per cent of the total GDP has seen many job losses reduce cash flow as well as inability to sufficiently service loans.

“We are also reminding small business that the chamber has a facility with Equity Bank, Sharjer Chamber Dubai and Etihad Insurance where they can access unlimited amount of financing payable between 60 to160 days,” he said.

 Members can apply online and would be facilitated by the Chamber. These are just but a few among other development partners such as Financial Sector Deepening Kenya (FSD). Members can access this cheap facility as long as their books are in order including tax returns, he said. 

Speaking at the conference Lilian Comba, the Head of Finance Officer at Gichoya Development Company shared how difficult it has been for small business during this period including difficulties in collecting credit. 

“Low sales, high transport costs and low international trade and supplies has led to staff layoffs and at times total closure of businesses,” she said. 

Philip Muema, managing partner at Anderson Tax projected a one per cent drop in the 2020 GDP growth rate and noted that 2020 was not the year to make profits but to survive. 

He also encouraged businesses to take advantage of cheap loans from commercial banks and claim VAT refunds. 

“Post Covid-19 is now and people must work harder and push for higher profit margin as business change their working models in the new normal,” he said, urging business to talk to Kenya Revenue Authority , especially if they  may not have taxes to return during the pandemic.

Survival mode

HF Group CEO Robert Kabaara, who expressed confidence that Kenyan business will emerge stronger and better from the pandemic, noted some lessons and new practices, for instance, better hygiene in the office and online meetings. 

Kabaara said HF Group had since evolved into a fully-fledged commercial bank with products such as tailor-made cheap loans for small businesses. 

“We are committed to offering timely and affordable credit especially during this time,” he said, calling on businesses to adapt new ways of working and thinking ahead of times in order to survive.

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