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Monday, 13 March 2017 15:36

Entrepreneurship in Kenya

Kenya has been witnessing major growth in entrepreneurship and innovation, led by a rising interest towards new technologies and mobile connectivity. Today, Kenya is leading the way in terms of digital technology development in Africa. The country has been experiencing a boom in internet and mobile savviness with a 90% mobile penetration as of 2016, among which, 44% of mobile users’ own smartphones1.

 

 

 

Percentage of people using smartphones in Kenya in 2014 and 2016

Google Consumer Barometer1

The leading innovation that Kenya experienced in the past years has been mainly led by mobile money and instant transfer of funds usage. With 96% of households using mobile money in Kenya, it has become dominant over traditional money transfer solutions that are costly and time consuming compared to mobile money services. Moreover, the leading provider of mobile money, M-PESA, also appealed to rural areas and it is believed to have raised 2% of the population out of poverty. This is as a result of the tendency of users, especially women, to be more enticed and open to doing business with the ease of funding and money transactions offered by M-PESA2.

Survey results to: “Do you use any mobile money service?”

2016 Financial Inclusion in Kenya3

Moreover, Kenya is ranked first in Sub-Saharan Africa in terms of technology transfer and expenditure on research and development4. The government’s engagement in technological advances provided greater opportunities for Kenyans in being more innovation driven and thus, enabled them to be attracted by entrepreneurship and risk-taking.

Some of the initiatives led by the Kenyan government to increase the citizen’s approach to entrepreneurship are represented in several public sources of funds for entrepreneurs. These funds target different parts of the population, such as funds dedicated to increasing entrepreneurial access to young people and women as well as sector dedicated funds5. The Kenyan government has also put a lot of emphasis on new technologies, through extensive investments in internet infrastructure. In 2014, Kenya was reported to have emerged as a leader in the internet market within the region, holding the highest bandwidth per person in Africa at one of the lowest rates, further increasing internet penetration in Kenya to 52.3%6.

As a consequence of all the above incentives combined with the accelerating development in the country, many Kenyan entrepreneurs have been recognized for their efforts and inspiring stories. In 2014, nine Kenyans were among Forbes publication on the 30 most promising entrepreneurs in Africa7. In 2016, 75 Kenyans were among the 1,000 startup entrepreneurs in Africa that benefited from the Tony Elumulu Foundation Entrepreneurship Program (TEEP), a program that grants an overall $100 million to 1,000 entrepreneurs selected from a pool of 45,000 applicants in 54 countries8.

In addition to that, the attractiveness of Kenya in terms of entrepreneurial development led the way to the country hosting the 6th edition of the Global Entrepreneurship Summit in 2016. The event was held in the presence of President Barack Obama and presented the US government’s commitment to global entrepreneurship and highlighted the potential in the country9, emphasizing on the attractiveness of the country and the need for investment especially for women and young entrepreneurs10.

What’s next?

The increased government interest towards raising entrepreneurship and digital innovation and acceptance has raised an entrepreneurship-friendly environment, allowing entrepreneurs to connect with peers, create partnerships, boost knowledge and secure investment. While Kenya’s future looks very promising, there is no doubt that the development plans being pursued by its government to tackle corruption and improve education and infrastructure, in order to be in line with the increasingly competitive global startup landscape, will require much effort and continuous monitoring.

Article by: Sofia Hazim, Analyst at Infomineo

Infomenio:

Infomineo is a business research provider, with a focus on Africa and the Middle East. By performing primary and secondary research, Infomineo provides its clients, which include the majority of the leading global management consulting firms and several Fortune Global 500 companies, with high quality data that leads to decision making success. For more information please contact This email address is being protected from spambots. You need JavaScript enabled to view it. or visit www.infomineo.com.

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Sources

[1] Google Consumer Barometer 2016 https://www.consumerbarometer.com/en/trending/?countryCode=KE&category=TRN-NOFILTER-ALL

[2] Kate Baggaley, Mobile money helped 2 percent of households in Kenya rise out of poverty, (Dec 2016) http://www.popsci.com/mobile-money-helped-2-percent-households-in-kenya-rise-out-poverty

[3]Sauti Za Wananchi, Money Matters: Citizens and financial inclusion in Kenya, (Dec 2016) http://www.twaweza.org/go/sauti-ke-2016-financial-inclusion

[4] The Global Entrepreneurship and Development Institute, Kenya, Sub-Saharan Africa and Global Entrepreneurship in 2016, (July 2015) https://thegedi.org/kenya-sub-saharan-africa-and-global-entrepreneurship-in-2016/

[5] Robert Malit, 7 public sources of funding for Kenyan entrepreneurs, (Feb 2016) http://www.herbusiness.co.ke/public-sources-of-funding-for-kenyan-entrepreneurs/

[6] Elayne Wangalwa, Kenya leads Africa's internet access and connectivity, (Sep 2014) http://www.cnbcafrica.com/news/east-africa/2014/09/09/kenya-leads-internet/

[7] Mfonobong Nsehe, 30 Most Promising Young Entrepreneurs In Africa 2014, (Feb 2014) https://www.forbes.com/sites/mfonobongnsehe/2014/02/04/30-most-promising-young-entrepreneurs-in-africa-2014/2/#d403d176d00e

[8] Capital Business, 75 Kenyans to benefit from Sh10bn Africa entrepreneurship program, (Oct 2016) http://www.capitalfm.co.ke/business/2016/10/75-kenyans-benefit-sh10bn-africa-entrepreneurship-program/?doing_wp_cron=1488385464.7398579120635986328125

[9] The United States Agency for International Development, (July 2015) https://www.usaid.gov/sites/default/files/documents/1860/Entreprenurship%20fact%20sheet.pdf

[10] Global Entrepreneurship Summit 2015 http://www.ges2015.org/