The State Department for Micro, Small and Medium Enterprises (MSMEs) has raised alarm over the vulnerability of Kenya’s informal economy, urging stakeholders to unite in building a resilient and inclusive MSME sector in the wake of recent disruptions caused by national protests.
Speaking during a high-level breakfast forum in Nairobi, MSMEs Principal Secretary Hon. Susan Mang’eni emphasized the critical role MSMEs play in job creation and economic transformation.
She revealed that approximately 1 million Kenyans enter the job market annually, yet only 200,000 secure employment in the formal sector, leaving the majority dependent on the informal economy dominated by MSMEs.
“MSMEs account for 77 percent of all businesses in Kenya and remain the backbone of our economy. They are instrumental in reducing poverty, fostering innovation, and economically empowering youth and women,” said Mang’eni.
She stressed that supporting MSMEs is a central component of the Bottom-up Economic Transformation Agenda (BETA), with ambitions to raise the sector’s national contribution from 40 percent to 60 percent in line with global benchmarks and support Kenya’s target of 20 percent GDP contribution from manufacturing by 2030.
Economic Shocks and June 25 Protests
Mang’eni expressed deep concern over the aftermath of the June 25, 2025, protests, which she described as a “dark moment” for the MSME sector. Demonstrations across 24 counties resulted in widespread destruction of property and business closures.
“Years of hard work and sacrifice were destroyed in hours. Families who depend on these businesses now face uncertainty and trauma that goes beyond financial loss,” she said.
Citing data, she noted that Kenya loses an estimated Ksh. 3 billion daily during protests, with MSMEs bearing the brunt due to their low financial resilience. Many of the businesses destroyed during 2024’s unrest have yet to recover.
While acknowledging the constitutional right to protest, the PS called for a balanced approach that safeguards both civic freedoms and economic livelihoods. “We need a new demonstration format—one that doesn’t put the backbone of our economy at risk.”
Government’s Immediate Response
To cushion MSMEs from future shocks and rebuild the sector, the State Department announced several interventions:
Formation of a Rapid Response Assessment Team to document and support affected businesses.
Fast-tracking of business registration and license renewals for disrupted enterprises.
Coordination with insurance firms for quicker claims processing and MSME insurance sensitization.
Temporary relocation assistance through county governments.
Consideration of a Riot Risk Response Mechanism for future political or climate-related emergencies.
Acceleration of digital payment systems to reduce cash-related vulnerabilities.
Development of e-commerce platforms to ensure business continuity in times of disruption.
Mang’eni also praised the Hustler Fund Credit Repair Program, which has enabled over 25 million Kenyans to access more than Ksh. 71 billion. Over 400,000 borrowers now qualify for enhanced credit limits of up to Ksh. 150,000.
The Ministry of Cooperatives, MSMES and Development invited all stakeholders, including county governments, development partners, civil society, and MSME networks, to join in marking World MSME Day on June 27, 2025, at the Kenyatta International Convention Centre (KICC) in Nairobi.
“This day will be a celebration of innovation, resilience, and the transformative power of MSMEs,” said Mang’eni. “Let us come together to empower the sector that powers our nation.”