The Engine of the Economy

Micro, Small, and Medium Enterprises (MSMEs) are the undisputed engine of Kenya's economy, employing over 15 million people and accounting for more than 90 percent of all businesses. According to statements from the State Department for MSME Development, the sector contributes approximately 30 percent to the nation's Gross Domestic Product (GDP). Despite their critical role, many of these businesses face persistent hurdles that limit their potential, including restricted access to affordable credit, weak market linkages, and significant skills gaps in an increasingly digital world.

The Digital Imperative

In response, a concerted push towards digital upskilling is underway, championed by both government and the private sector. The consensus is clear: for Kenyan MSMEs to survive and thrive, embracing technology is no longer optional. "Digital transformation presents a unique opportunity for women-led businesses to scale and compete effectively. We must embrace technology to break barriers and unlock new opportunities," stated Susan Mang’eni, Principal Secretary for the State Department for MSME Development, at the Women’s Economic Forum Kenya in February 2025. This sentiment was echoed during a July 2025 summit where Mang'eni urged MSMEs to adopt technology to achieve global competitiveness while still catering to local market needs.

Entrepreneurs are already leveraging accessible technologies. Mobile money platforms like M-PESA are standard for transactions, while messaging apps such as WhatsApp and social media platforms are widely used for marketing and reaching new customers. This organic adoption highlights a foundational digital literacy, yet structured training is required to translate basic use into strategic growth. Essential skills in digital marketing, financial planning, record keeping, and customer service are seen as having a powerful multiplier effect on revenue and efficiency.

Government Policy and Legislative Support

The government is formalizing its support through new policy and legislation. The draft MSME Policy 2025 and the proposed Micro and Small Enterprises (Amendment) Bill, 2025, are central to this effort. Public participation forums for the new framework were conducted nationwide in early 2025. The key objectives of the policy include enhancing MSMEs' access to technology, finance, and markets. The amendment bill specifically proposes that the Micro and Small Enterprises Authority (MSEA) advise enterprises on "technology upgrading, quality and design improvement, standards and product development, and innovation" in consultation with other state agencies. This legislative push aims to create a more integrated and supportive ecosystem that nurtures businesses from incubation to maturity, addressing the high failure rate where many MSMEs do not survive past their first anniversary.

To provide current, data-driven insights for these policies, the Kenya National Bureau of Statistics (KNBS) is undertaking the 2024 MSMEs survey, the first comprehensive study of the sector since 2016. According to a January 2025 consultative meeting, the survey will capture data on skills gaps, demand for credit, and training needs to better inform capacity-building initiatives.

Private Sector Initiatives and Proven Impact

The private sector is playing a crucial role in delivering practical training. Safaricom, a key player in the digital economy, runs the "Grow with Safaricom Business" platform, which provides entrepreneurs with financial literacy training and digital onboarding. Since its launch in March 2024, the forum has reached over 1,000 businesses across several regions, equipping them with tools to digitize operations and enhance their online presence. The company's 2025 Sustainable Business Report, released in October 2025, highlighted that its operations contributed Ksh809 billion to Kenya's GDP, underscoring the significant economic footprint of the digital ecosystem it supports.

The impact of such training is tangible. Case studies from the eTrade Alliance's 'e-Biz Kwa Vijana' program show direct benefits. For instance, Robert Wambugu, an entrepreneur, expanded his customer base by getting onto e-commerce platforms like Jumia and Jiji after the training. Similarly, Zilpah Khasiro improved customer interactions for her business, Joycil Enterprise, through newly acquired digital marketing skills. Other initiatives, like those by the Kenya Private Sector Alliance (KEPSA), are focusing on emerging fields, with one program training over 70,000 leaders and SMEs in AI and cybersecurity. In July 2025, KEPSA also signed a major agreement with AI developer MindHYVE.ai™ to create a national AI toolkit to empower small businesses with intelligent finance and legal compliance tools.

The Road Ahead

While the benefits are clear, challenges remain, including the cost of digital tools and persistent skills gaps, particularly in technical areas. However, the coordinated efforts from government bodies, industry leaders like Safaricom, and business associations such as KEPSA signal a strategic national focus. By combining enabling policies with practical, accessible training, the goal is to transform Kenya's vibrant MSME sector into a more resilient, competitive, and powerful driver of sustainable economic development for the entire East Africa region.