Kenya Needs a Centralised Information Database For its SMEs

A centralised information database will enhance efficiency in planning, capacity building and providing support for Kenya’s Small Medium Enterprises.

“We need to have databases of the SMEs, their products. A centralized database will help give lenders information on prospective clients. SMEs must also be empowered in terms of capacity building,” said Ms. Ibukunoluwa Odegbaike the Managing Director of Guaranty Trust Bank, East Africa.

Ibukun Odegbaike said there are a lot of opportunities for regional trade between Kenya and the East African Community member states and also within the wider international trade arena.

For this to be achieved, she urged the SME sector to pool resources together to compete internationally.

“In terms of the volumes we have, Kenya does not have manufacturing volumes at the level of China. So we do not have critical volumes coming from SMEs. Whilst one person is manufacturing a certain output that does not meet international demand we now need to see how to pool output so as to compete with countries like China,” she said.

She was talking about ‘SMEs and Regional Trade’#CEOChat   discussion which is part of a series of online sessions organised by the Kenya Bankers Association (KBA).

The #CEOChat is held every quarter where selected Chief Executives of Banks host live chat sessions while giving their views on the various topics related to banking over a period of four weeks.

The GT Bank CEO also disclosed that KBA will soon be launching the Inuka Enterprise Capacity Building Program which is a free online resource for SMEs.

“After building capacity, the next is access to capital. If you look at Kenya relative to other countries in Africa, we rank top in terms of access to credit for SMEs, so while we say we are not doing enough, there is something we are doing right. That said, there is still more we can do to address the challenges of the ease of doing business to complement the progress that has been made in access to finance,” she observed.

Further, she noted the immense trade opportunities between Africa and other continents compared to within ourselves and called for more efforts to be done to promote intra-Africa trade.

“For instance, when you look at the figures from Kenya Bureau of Statistics, we see that Kenya has many international trading partners. In horticulture, for example, our largest market in the Netherlands and other European countries. How can we promote more appreciation of this lucrative export within Africa? We do have trade with several countries like Uganda, Egypt, DRC, Tanzania but there are 54 countries in Africa so we can do much more.”

SMEs to avoid the FX risk, they need to take positions by match currency for currency.

“If you are an importer who gets products from China, as you source your products, you wouldn’t go to a bank and take a loan facility in dollars because tomorrow if there is a weakening in the Kenya shilling, the loan repayment amount would be higher and therefore you would need more shillings to service that US Dollar facility and you may not be able to pass that cost to the consumer of your products and services. So you need to match currency for currency, which means the currency that you earn in is the currency you borrow in. If you sell in Kenya shillings you should borrow in Kenya shillings to avoid FX risk.”