In the recent past Kenya’s economy has been largely driven by small scale business that make up a large percentage of the country’s revenue. In Kenya, SMEs have played a key role in economic development and job creation. In 2014, it was notable that 80% of jobs created during that period were dominated by SME’s, which also contributed to 45 % of Kenya’s GDP.
Current and past governments have become strong in supporting business operations over the years especially for the youth ,women and people living with disabilities .The governments have introduced agenda’s such as Uwezo Fund ,Youth Fund and AGPO to provide avenues for the distinct groups to access resources needed to support businesses under these groups. Private Institutions in the financial sector have also not lagged behind in supporting this agenda through the introduction of innovative products and services that assist these groups of people to access a wide variety of resources needed to support their businesses.
Today it is the hope and vision for every entrepreneur and business owner to established trade in the country and built industries and empires through the generations. However, it is unfortunate that even with the support of both the private and public sector, most small scale businesses will never celebrate their first birthday. According to recent statistics by the Kenya National Bureau of statistics, close to 500,000 SME’s close shop annually with 2.2 million SME’s and MME’s having closed shop in the last six years. This show’s a worrying trend in the growth curve of small scale businesses that we expect to be the countries industrial and economic backbone in the future.
Natural and uncontrollable disasters such as fires, theft and political violence can lead to paralysis of a business forcing it to eventually shut down. Daily revenue is lost, property is damaged or lost driving the business to a halt. A Kenyan plastic factory in the heart of industrial area played victim to a similar incident. The factory suffered damage and loss of property worth millions of shillings in an unexpected fire in early 2014. It’s because of such incidents that all businesses must learn to be more risk aversive by Insuring their businesses and make well calculated decisions to protect their assets and business property.
Resolution Insurance is playing a role in helping businesses protecting what they value the most; their assets. Resolution Insurance has tailored different insurance products that cover business from common flacks such as unexpected fires, theft of money and political violence amongst many more. Payment of monthly premiums that translates to a very small percentage of the business income helps businesses owners secure what the value leaving a substantial amount for reinvestments and business operations.
With the uptake and adoption of this plan emerging and growing businesses are sure to protect themselves from near potential risks that can affect their progress. To ensure business continuity companies will be able to cushion themselves against uncertainties in the market and the negative impacts of operating business environment that could lead to massive losses and closures.
The writer is RESOLUTION INSURANCE GROUP CEO – PETER NDUATI