How to identify potential growth sectors for SMEs amid COVID-19

Kenya-based SME consultancy firm, Viffa Consult, has taken a proactive approach in identifying sectors with growth potential for SMEs and entrepreneurs despite the challenges brought about by the COVID-19 pandemic. The company has recently launched a series of reports aimed at shedding light on non-traditional sectors that have the potential for high growth and sustained market share. One of the key sectors highlighted in their initial report is the coconut commodity market in Kenya, which has been largely untapped and holds significant promise for growth. In an exclusive interview with CNBC Africa, Managing Director Victor Otieno shared insights into the firm's strategic initiative and the opportunities that lie within the coconut sub-sector. Otieno explained that the ongoing studies conducted by Viffa Consult seek to steer SMEs towards sectors that have the potential for rapid and sustainable growth, particularly in the wake of the disruptions caused by the pandemic. With traditional sectors such as tourism taking a hit from COVID-19, the consultancy firm is focused on guiding entrepreneurs and SMEs towards alternative sectors that are often overlooked but hold great promise. Otieno highlighted the pressing need for many individuals who have been laid off by larger organizations to explore new opportunities in sectors with growth potential. He emphasized the necessity for SMEs to adapt to the current economic climate, stating that closure is no longer an option for many businesses. The mortality rate of SMEs has significantly increased due to the pandemic, making it crucial for entrepreneurs to consider diversifying into new sectors to survive and thrive. As part of their series, Viffa Consult plans to release 10 reports on potential growth sectors, with the coconut sub-sector being the first installment. Otieno revealed that the coconut market in Kenya boasts a market size of approximately 30 billion US dollars, with a projected growth rate of 17% by 2025. Despite the immense market potential, Kenya currently falls short in leveraging this sector, exporting minimal value-added coconut products. The lack of awareness and information among coconut farmers and potential entrepreneurs has hindered the sector's development. Otieno emphasized the importance of disseminating information and providing guidance on investing in the coconut sub-sector, including the need for training, new equipment, and value addition initiatives. Viffa Consult aims to offer a comprehensive perspective on the investment opportunities within the coconut market and other highlighted sectors. The consultancy firm plans to engage with stakeholders who show interest in exploring these sectors to facilitate informed decision-making and feasibility studies. Otieno also discussed the resilience of certain sectors amidst the pandemic, noting that local manufacturing tied to agriculture has served as a shock absorber due to its reliance on domestic inputs. In contrast, wholesale and retail sectors that heavily depend on imports have been significantly impacted by disruptions in the global supply chain. Viffa Consult encourages SMEs to consider sectors with more resilient value chains to mitigate the effects of future crises. By identifying and promoting growth opportunities in non-traditional sectors such as the coconut commodity market, Viffa Consult aims to support SMEs in navigating the current economic landscape and securing sustainable growth prospects. Through strategic insights and proactive guidance, the consultancy firm seeks to drive innovation and resilience among Kenya's entrepreneurial community, paving the way for a diversified and dynamic SME sector in the post-pandemic era.