Kenya has a strong entrepreneurial culture since many people understand the advantages of starting their own firms. Nevertheless, many entrepreneurs in Kenya encounter their fair share of difficulties when they launch and manage their enterprises despite the excitement for entrepreneurship. In this article, we will look at the biggest challenges entrepreneurs in Kenya face.
1. Lack of skills and experience
Many business owners in Kenya lack the knowledge, skills, and experience required to successfully develop and run a company. This may result in expensive errors and a loss of focus, which could harm performance and lower earnings. The low level of trained labor is a challenge for companies to obtain qualified employees for their operations.
2. Corruption
Corruption comes in different forms for example bribery, extortion, influence, fraud, and embezzlement of funds. Corruption has been around for a while in Kenya and because of the fact that it has always been around it’s being treated as a normal issue. There is this phrase commonly used by people in different government positions “toa kitu kidogo” which in English means “give something small”. This phrase is a polite way of asking for a bribe.
3. Poor Infrastructure
Infrastructure not only contributes to economic growth, but it is also an important input to human development. Some parts of Kenya have poor infrastructure, including unreliable electricity, poor roads, and limited internet access, which make it difficult to do business.
4. Limited access to financing
Another major challenge facing entrepreneurs in Kenya is limited access to credit. Small and medium-sized businesses in particular may have trouble getting access to financing. Credit is essential for entrepreneurs to purchase the necessary equipment and supplies to start and operate their businesses. Banks and other financial institutions have stringent requirements for issuing loans to entrepreneurs. This and the prohibitively expensive cost of borrowing money can be a major obstacle for entrepreneurs.
5. Changes in technology
One of the fastest-growing sectors in Kenya is technology. Changes in technology pose a huge challenge to the growth of businesses. As much as they are beneficial, new technologies can disrupt existing markets and create new competition. Many small enterprises lack the finances to keep up with the rapid technological changes.
6. Unpredictable laws and policies
Kenya has a history of policy changes that can make it difficult for businesses to plan for the future. Sudden changes in regulations or policies can disrupt business operations and affect profitability. The government and stakeholders often carry out new laws to regulate the operations of enterprises.
7. Political instability
Kenya has experienced political instability in the past which affects the business environment. Around elections there have been cases of violent protests and ethnic conflicts which create uncertainty in businesses. political instability leads to economic constraints.
8. High rate of poverty
Kenya is still a developing country, and poverty levels are relatively high. This can limit the purchasing power of consumers and may make it difficult for businesses to generate significant profit.
9. Bureaucracy
The process of registering a business and obtaining necessary licenses and permits in Kenya can be time-consuming and complex, leading to frustration and delays.
