RR Walid Badawi remarks at the Handing over of UNDP support to Micro and Small Enterprises Authority (MSEA)

November 15, 2021

UNDP Kenya & MSEA team during handover at MSEA offices, Utalii House

Let me take this opportunity to appreciate MSEA Chief Executive Officer, Mr. Henry Ridhaa and his team for overseeing a collaboration whose history has transcended two development planning cycles (2013-2017; and 2018-2022). Such a long-standing partnership is reflective not only of commonality of interest but also mutual recognition of the key role that MSEs play in poverty reduction and inclusive growth. This makes MSEA a key ally in advancing UNDP’s role as the integrator of all efforts aimed at achieving SDGs.

I would recall that UNDP supported MSEA implement its first strategic plan (2013-2017) by supporting the finalisation of the SME Handbook and harmonisation of Guidelines for SMEs regulation at the county level, in line with the devolved system of governance. The understanding of the needs of the sector and the capacity of the Authority became more apparent with the MSEs Survey of 2016 and later the revised MSE policy in 2020, thereby demanding from MSEA new ways to be relevant and responsive.

Even though the authority continuously identified coordination and registration of the MSEs as paramount to enhancing the contribution of the sector to the Country’s GDP, in terms of employment creation, the solution to the challenge of coordination remained elusive over the years. The importance of data driven policy making and regulation of the MSME sector, makes coordination the more important. Previously, successive MSEA strategies geared towards addressing this challenge were hampered by the lack of a centralised platform for collating comprehensive data, sharing, and disseminating information; as well as overlapping mandates among government support institutions that provide services to the sector.

However, COVID-19 presented an opportunity to implement some of the suggestions that had been proposed in the MSEs Coordination Strategy of 2019. In April 2020, the Cabinet Secretary for Trade, industrialization and Enterprise Development, Hon Betty Maina, called UNDP and UNIDO to a meeting to discuss support to the ministry towards establishing a desk for coordinating various stakeholders at national and county levels as well as creating mechanisms that would incentivise MSMEs to engage in the local production of Personal Protective Equipment (PPEs).  The role of coordination in the sector became more apparent then. The meeting set off a three-phase collaboration road map that has defined the UNDP-MSEA partnership to date. These included:

I.                 Supporting the dissemination of information on COVID-19 to MSMEs clusters: including sensitisation of MSEs on the need to adhere to the COVID-19 health protocols.

II.               Mapping MSMEs by partnering with mobile service providers to allocate non-chargeable USSD codes through which MSMEs can register their details and thus enable the Government to have a dependable MSME database.

III.              Increasing the potential for MSEs to link to medium and large enterprises and deliver large orders through subcontracting opportunities hence fast-track production and delivery of goods such as PPEs.

At the time, UNDP was implementing its first Country Office COVID-19 support project which was geared towards supporting preparedness and response to immediate health and humanitarian needs occasioned by the pandemic but also seized the opportunity to support recovery efforts for the medium and longer-term through under the banner of the 3x3 framework (“Prepare-Respond-Recover” and “Health-Humanitarian-Development”).

Through this initial intervention in 2020, UNDP provided US$ 120,000 and accomplished the following:

a)     Development of a call center

b)     Development of a call center database & application server

c)     Development of the Registrar System

d)     Development of a CRM system for the registrar

e)     Supply of 10 Laptop computers for the call center

In June 2020, UNDP Global Office presented to all countries its programme and policy offer 2.0 which provided an innovative financing vehicle, called Rapid Financing Facility (RFF), to address COVID-19 concerns beyond recovery and sustain progress towards the realization of sustainable development goals.

UNDP in Kenya successfully applied for this RFF under the project ‘Green Economy Youth Activation Programme (GrEYAP)’. Add that GrEYAP has provided the opportunity to engage with MSEA to advance the second and third phase of the partnership by supporting the procurement of the infrastructure as well as the logistics needed to develop the MSEs database and enhance MSEs capacity to establish market linkages, access information, and trade in both domestic and international markets. These have amounted to US$ 132,523. In total UNDP support to MSEA currently amount to about US$250,000.

The second batch of IT and logistical support to regional offices included:

a)     14 printers/scanners

b)     14 laptops and iPads

c)     14 projectors and screens

d)     Integration of the Registra office with mobile services application

e)     One 4x4 vehicle

Given GrEYAP project’s focus of harnessing the participation of youth and women in the green economy and promoting entrepreneurship that leverages digitalisation, the latest partnership between UNDP, Stanbic Foundation and MSEA under the Future-Ni-Digital campaign is important to encourage MSEs to utilize digital technology and tap on the huge market opportunity that virtual platforms provide.

GrEYAP is not the only UNDP engagement with MSEA. UNDP ACCELERATOR Lab, together with MSEA, has conducted research and explored the various ways in which MSMEs can be enabled to achieve that ‘Quantum Leap’ in the digital space and accelerate recovery in the post-COVID-19 period. Future-Ni-Digital is UNDP’s attempt to implement some of the recommendations from the study.

The report on the impact of COVID-19 on Kenyan MSMEs- conducted late last year by the UNDP Accelerator Lab in Kenya and MSEA. This assessment is a gender responsive analysis of characteristics of Micro Small and Medium enterprises, impact of the COVID-19 pandemic on operations and income, challenges faced by the sector with the mitigation mechanisms and the support and needs expressed by respondents. It goes further to analyse the digital maturity of the enterprises as well as the support needed to facilitate digital transformation as a key strategy to achieve sustained competitiveness of MSMEs. We hope that the insights, data, and recommendations from this report will inform new or existing areas of support for MSMEs and will be a critical knowledge source for engaging with and supporting MSMEs in Kenya, providing the vehicle to help in mapping of MSMEs, encouraging MSEs formalization and registration through USSD and Bulk SMS, partnering to promote digital literacy and generally improving the potential of MSEs to access markets and finance represent a multi-scalar response that UNDP has adopted and makes MSEA a key ally in the quest to better economic opportunities for vulnerable groups and support the country’s progress towards attaining SDGs.  

Finally, I congratulate MSEA on its new strategic plan 2020-2024 and offer that UNDP remains an ally as MSEA seek to improve the contribution of the sector to the economy and bring more families out of poverty.