Small business agencies take off in a month

Mr Paul Gichohi, a quail farmer, displays birds in his home in Tetu. Small enterprises will now gain recognition once the agency is up and running. FILE 

By NEVILLE OTUKI, notuki@ke.nationmedia.com

In Summary

• The establishment will mark the end of a long wait for informal sector traders who have been yearning for recognition from the State.
• The MSE authority hopes to create 700,000 new jobs by 2017 and has been allowed to use for 464 parcels of land across Kenya for construction of business parks.
• The informal sector employs more than 80 per cent of the workforce but contributes only 18.4 per cent of Kenya’s gross domestic product.

Key institutions created under a new law meant to streamline micro and small enterprises will be established in a month, the body in charge has said.

The establishment will mark the end of a long wait for informal sector traders who have been yearning for recognition from the State, financial institutions and other businesses to access credit and new markets for expansion.

“We expect to float the position of registrar for MSEs this month. By February, the registrar should be on board,” MSE Authority acting chief executive officer Patrick Mwangi said.

The authority hopes to create 700,000 new jobs by 2017 and has been allowed to use for 464 parcels of land across Kenya for construction of business parks.

The land was previously in the custody of the defunct local authorities and was earmarked for development of market sheds for the informal sector.

The registrar will be in charge of listing small businesses while the tribunal, to be established by March, would provide dispute resolution support to traders.

The informal sector employs more than 80 per cent of the workforce but contributes only 18.4 per cent of Kenya’s gross domestic product.

READ: Small businesses get boost as Kibaki approves new law

The recruitment of the registrar will be done by the office of the Attorney General while that of the seven-member tribunal would be done by the Judicial Service Commission.

Enterprises seeking registration will be required to be members of a registered business association to be issued with certificates. The Act places enterprises into four sectors - agribusiness, services, trade and manufacturing.

The certificates would enable them to negotiate better credit terms and access contracts from county and national governments which have announced up to 30 per cent of tenders will be allocated to local businesses, youth and women groups.

The organisation is also expected to see informal businesses create linkages with established businesses where they can supply raw materials to industries and finished products to supermarkets and other outlets.

The Kenya Private Sector Alliance (Kepsa) would support the businesses with training.

Without the registry and the tribunal, the MSE Act 2012 cannot be operationalised even after the appointment of the 18-member authority last year.

Mr Mwangi said the setting up of an MSE Fund, from which traders would get subsidised loans, would take longer because it was not budgeted for in the current financial.