What Is The Impact Of Covid-19 On Small Businesses In Kenya?
When Covid-19 first hit Kenya, every sector felt the shock. It was an event in history that was not anticipated…
When Covid-19 first hit Kenya, every sector felt the shock. It was an event in history that was not anticipated and many were caught unprepared. Most businesses in the country were caught unaware and had a difficult time adjusting.
Most of the people thought the pandemic was just some passing cloud. That it was just here for a while. More than two years later and the pandemic is still sweeping around the world with new cases reported in China. Experts say it is the new norm that will not go away any time soon.
Although the Covid-19 vaccines are being rolled out vigorously around the world, and economies such as Kenya striving to open up, the effects of it can still be felt and many will take ages to recover. Many that shut down are yet to reopen.
The truth is, when the pandemic first hit, many businesses were thrown into panic mode. Many shut down as one of the preventive measures. There are no official records of just how many SMEs shut down but the numbers might be mind-boggling.
For instance, before Covid-19, the Kenya National Bureau of Statistics estimated that at least 450,000 SMEs were shutting down annually in Kenya. This is at least 30,000 monthly and 1,000 dying daily. With the pandemic, the numbers could be twice.
At the same time, people lost their jobs. With the uncertainties about the future, small businesses wanted to cut down on costs and one way was to reduce their workforce. Kenya Bankers Association says at least 1.7 million Kenyans lost their jobs in the first three months of the pandemic in Kenya.
A reduction in sales for small businesses in Kenya was witnessed. Government policies such as curfews and restriction of movement meant businesses operated fewer hours hence little time to make sales as before. This is however starting to change as the economy starts to open.
The worst thing that happened to small businesses in Kenya was that majority of them were unable to access credit. Commercial banks sidelined them as they were considered risky borrowers and so many went under.
It was not all bad that came out of the Covid-19 though. One positive thing that this pandemic brought was the realization of the power of technology. Many businesses took to online platforms to advertise and sell their products and services. Those that took to online platforms survived and those that depended on buyers visiting them physically had a difficult time. The curfew was suspended and operation hours for businesses in Kenya were extended. Things are looking good as the country heads into the festive season.