The government is ramping up efforts to support small businesses through a fresh policy push aimed at easing access to finance, boosting competitiveness and bringing more informal enterprises into the formal economy.
This comes as regulators and development partners intensify outreach to micro, small and medium enterprises (MSMEs) to improve awareness and uptake of existing support frameworks, amid concerns that many firms remain locked out of credit and structured markets.
The Micro and Small Enterprises Authority (MSEA), working with Dutch development organisation SNV Netherlands Development Organisation, has been holding a series of business forums across key counties to bridge the gap between policy design and implementation.
“We continue to support MSMEs through policies that promote business formalisation and targeted capacity-building initiatives,” said MSEA Senior Assistant Director Tabitha Gicheru “our investment in Jua Kali worksites and Constituency Industrial Development Centres underscores our commitment to providing affordable workspaces for MSMEs to grow.”
The latest forum, held in Nakuru, brought together more than 100 small businesses in the leather and textile value chains, alongside representatives from tax authorities, business associations and county governments.
These engagements are part of a broader government strategy to strengthen the MSME ecosystem, which accounts for the bulk of employment in Kenya but continues to face structural barriers including limited financing, informality and weak market linkages.
At the centre of the discussions is the proposed MSME Amendment Bill 2025, which seeks to overhaul the policy framework governing small businesses.
The draft law is expected to introduce measures to expand access to affordable credit, improve market access and create incentives for informal enterprises to formalise.
Formalisation has emerged as a key policy priority, with authorities arguing that bringing more businesses into the formal fold would widen the tax base, improve access to government support programmes and enhance enterprise sustainability.
MSEA officials say many small businesses remain unaware of existing financing and capacity-building programmes, limiting their ability to scale. Current initiatives include government-backed youth funding schemes and enterprise support programmes targeting job creation and industrial growth.
The authority is also investing in physical infrastructure such as Jua Kali worksites and Constituency Industrial Development Centres to provide affordable workspaces for small manufacturers.
Development partners are complementing these efforts by targeting gaps in both financial and non-financial support.
SNV, through its Investing in Young Businesses in Africa (IYBA) SEED programme, is focusing on improving access to business development services for youth- and women-led enterprises, particularly in sectors such as agriculture, energy and water.
The programme aims to strengthen enterprise resilience and expand employment opportunities, especially as Kenya grapples with high youth unemployment and a growing informal sector.
Industry stakeholders say that while policy reforms are necessary, execution remains the biggest challenge. Previous initiatives have often struggled with low awareness, bureaucratic hurdles and limited coordination between national and county governments.
To address this, the forums have increasingly focused on direct engagement between policymakers and entrepreneurs, allowing businesses to raise concerns around taxation, compliance costs and access to markets.
Participants also highlighted persistent barriers such as high cost of credit, limited collateral and uneven enforcement of regulations, which continue to hinder MSME growth despite multiple policy interventions.
