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In Kenya, small businesses make up majority of all the enterprises. Therefore it is the main source of employment to the Kenyan population. The need to create employment opportunities is brought about by the high rate of labour force growth than population growth. Persistent slow economic growth especially in the public sector, has forced many people e.g school leavers and college or university graduates to venture into small businesses.
This small businesses include: selling fruits and vegetables at the roadside, selling clothes and shoes (both new and secondhand),small retailers or hawkers selling ceraeals,home suppliers and other goods, operating a kiosk, car wash, Agri-business, shoe repair, motorcycle rider among others.
More people benefit from this small enterprises as they are able to provide for their families e.g pay schools fees, buy food and other necessities.
Informal sector is a crucial sector for most of the developing countries like Kenya because the private sector cannot accommodate the growing number of unemployed persons. The informal sector has come in to fill that gap.
The Kenyan Government treats this sector as a major component of economic development. It is more than just an employer but also in the Government development policies. The Government identifies small enterprises as important and helps or facilitates them to move into the formal sector. This enable them to become major contributors in the creation of employment to the youth and also promoting economic development.
To promote them, the Kenyan Government has formulated policies that promote and quicken the process of stating a small business. E.g simplifying the legal requirements for starting a businesses by removing bureaucracies. In cases where people were required to acquire many permits, that has been reduced significantly by introduction of a single business permit.
The sector’s main challenge is inadequate funds for starting ad operating the business. The Government should come up with adequate policies to boost the sector to which will enable it to provide employment to more people.
Kchris answered the question on November 14, 2018 at 14:27
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