SMEs targeted in poverty war

March 23, 2009
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, NAIROBI, Kenya, Mar 23 – The government says it has earmarked small and medium enterprises as a tool for poverty eradication in the country.

Permanent Secretary in the Ministry of Trade, Silas Njiru, said trade and investment initiatives would be promoted to fight poverty.

“By empowering small scale business owners to do business they will in turn offer employment to unemployed Kenyans thus combating the issue of poverty,” he said.

He was speaking during the launch of 60 websites for small and medium enterprises, which were developed with the help of the United States Aid Agency and the Export Promotion Council Trade Development Program.

According to Steve Ndele of USAID Kenya, the cost of using the internet to do business is considerably low as compared to other convectional means.

“The low cost of doing business over the internet assists SMEs address financial limitations that still remain a hurdle to many,” Mr Ndele said.

His sentiments were echoed by Mr Njiru who said internet provides the best marketing strategy at low cost and is able to reach a large number of potential customers world wide.

“The low cost of e-commerce also ensures that one reaches a wider market thus increasing chances of repeat business,” Mr Njiru said.

Other benefits of e-marketing, they said, include faster response for both consumer and marketer, increased ability to measure and collect data, increased interactivity and a greater market to business with.

But even with the websites there have been reports of several challenges facing entrepreneurs. One problem that has been noted is the ability to meet big orders from the international market.

This has forced businesses to forgo the orders or meet them in piecemeal which kill customer morale in turn diminishing chances of repeat business.

Jacinta Kinyihu, a project manager for the trade development programme, advised small businesses to form associations that would help share the burden.

“By sub-contracting, you not only meet the demand but ensure money flows into the country and increase chances of getting similar orders if not larger ones in future,” she said.

Small and medium scale businesses are required to pay a fee of Sh7,500 for the first year as compared to the Sh50,000 plus if they were to go to other web developers.

The fee is meant to give them a sense of ownership that would make them take up an interest of their website and look for innovative ways to make it better.

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