How Kenyan SME's are coping with reduced business due to COVID-19

The COVID-19 crisis has hit Kenyan SMEs particularly hard, compounding challenges already faced by the sector in recent years. Victor Otieno, Managing Director of Viffa Consult, highlighted the pre-existing obstacles such as political instability, limited access to finance, and local borrowing restrictions that have plagued SMEs since 2017-2018. The outbreak of the coronavirus has further exacerbated these issues, creating a daunting environment for small and medium-sized enterprises in Kenya. To cope with the impact of the pandemic, Otieno emphasized the importance of communication and community engagement for SMEs. He stressed the need for transparent and frequent communication with employees, suppliers, and customers, leveraging expert guidance from organizations like the World Health Organization and the Ministry of Health. By maintaining open dialogue and implementing mitigation strategies, SMEs can navigate the challenges posed by COVID-19. In response to the liquidity and cash flow challenges faced by SMEs, initiatives like Safari Com's increased transfer limits and financial institutions' measures to free up cash flow have been welcomed as critical support for the sector. These interventions aim to provide SMEs with the financial flexibility necessary to sustain their operations during this turbulent period. Looking ahead, Otieno highlighted the potential role of government support in mitigating the impact of the crisis on SMEs. He proposed measures on both the demand and supply sides, suggesting that increasing the minimum tax bracket to free up disposable income for consumers could stimulate spending and support SMEs. By implementing targeted policies and interventions, the government can play a pivotal role in alleviating the economic strain faced by Kenyan SMEs. As SMEs grapple with the unprecedented challenges brought about by the COVID-19 pandemic, innovative strategies and collaborative efforts will be essential in ensuring their resilience and survival. By adapting to the evolving business landscape and leveraging available support mechanisms, Kenyan SMEs can weather the storm and emerge stronger from this crisis.