How the Kenya Industrial Estates is helping MSMEs countrywide to grow

Micro, small and medium enterprises, popularly known as MSMEs, are strategic drivers of socio-economic transformation in developing nations. In Kenya, they play a critical role in job creation and wealth generation in all sectors of the country’s economy. However, they also face difficult challenges and often require a helping hand to grow.

The Kenya Industrial Estates (KIE), a parastatal and development finance institution (DFI) in the Ministry of Industrialisation, Trade and Enterprise Development, plays this role by championing the development of MSMEs throughout the country, with a focus on entrepreneurship and value addition to locally available raw materials.

This is in line with Kenya’s Vision 2030 blueprint, in which the manufacturing sector is identified as one of the six drivers of the economy. Moreover, Sustainable Development Goal number nine identifies building of resilient infrastructure, promoting inclusive and sustainable industrialisation and fostering innovation as key to sustainable progress.

The mandate of KIE thus involves facilitating growth in the industrial sector by promoting entrepreneurship and apprenticeship, providing medium and long-term development finance to indigenous MSMEs, and incubating them to aid their survival and growth. With these, KIE makes it possible for micro and small enterprises to graduate to medium and large firms. Given that KIE’s engagement with MSMEs is countrywide, its programmes go a long way in supporting rural industrial development.

KIE conducts enterprise incubation at its industrial sheds/SME Parks and estates. Enterprises within the incubators access a pool of shared support services to reduce their overhead/production costs (e.g. water, electricity, waste disposal, security services, training centres/halls and exhibition halls). They also benefit from management and technical assistance, which involve skills upgrading, marketing and advisory services. They gain through networking services, which create synergy between client firms and associations. They further benefit from financial support for use as working capital, which they can use to acquire machinery/equipment, or for expansion, modernisation or rehabilitation, among other needs.

SME credit finance through KIE involves providing affordable funds for value addition to individual entrepreneurs, small and medium companies as well as youth and women groups.

The amount provided per enterprise ranges from Ksh100,000 to a maximum of Ksh20 million. This is offered at subsidised/non-commercial interest rate (10 percent per annum). The maximum repayment period is up to eight years, inclusive of a grace period of three or 12 months.

In addition, KIE offers Business Advisory Services (BAS) to ensure the success and growth of its incubation programme. The agency recruits potential entrepreneurs countrywide through sensitisation seminars such as Seminar on Business Opportunities (SBOs) and Client Orientation Programmes (COPs).

Other BAS services include undertaking feasibility studies, preparation of business plans, project implementation/supervision/monitoring, entrepreneurial and management training, rehabilitation/expansion and repositioning/modernisation of projects, business counselling and needs assessment of SMEs.

KIE also facilitates sub-contracting to address MSME constraints such as access to market for their products. The agency facilitates linkages between MSMEs and the large-scale enterprises. The objective of the linkages and sub-contracting is to nurture smaller enterprises through technology and knowledge transfer.

The agency focuses on sectors that are labour intensive and critical for youth employment. These include agro-processing, leather and leather products, textile and apparel, wood/ furniture and metal fabrication, and electrical and electronics, among others. The sectors have been identified as critical to the achievement of Kenya's Big Four Agenda and Vision 2030.

KIE’s outreach of 37 branches and SME Parks spread across the country ensures the company’s products and services reach a wider customer base.

For more information on KIE, log onto www.kie.co.ke