Promoting Cooperatives for Sustainable and Inclusive SME Development
The role of cooperatives in enhancing the productivity of Small and Medium Enterprises is critical, yet it is still an area which has not been well explored. According to a 2014 report by the International Labour Organization (ILO), cooperative enterprises have one billion members worldwide, help secure the livelihoods of an estimated three billion people and provide more than 100 million jobs.
The cooperative way of doing business provides a wide range of opportunities to address the economic, social, and cultural needs and aspirations of people around the world. In Kenya, the cooperative movement saw the number of cooperatives grow by 30 per cent from 19,951 to 25,984 between 2017 and 2021 (Kenya Economic Survey, 2022). They impact about 63 per cent of the population directly and indirectly and contribute over 30 per cent to GDP (National Cooperative Development Policy, 2019).
The cooperative business model helps create and maintain sustainable business enterprises. It also creates jobs which pave the way for broader social and economic advancement, empowering individuals, their families, and communities. In particular, the cooperative model enables people with skills but, with little or no capital to pool resources to create employment and contribute to economic development. Therefore, it is important for the post-pandemic sustainable development framework to recognize the role of cooperatives in delivering on goals and integrating cooperative movement for more sustainable and inclusive development. The development of cooperatives is hampered by a lack of knowledge and understanding of the cooperative business model among policymakers and in society. Policy and legislation continue to limit the formation and growth of cooperative enterprises, while entrepreneurship education and business support services are often ill-equipped to help.
It is against this backdrop that Strathmore University Business School hosted the 10th Annual SME Conference and Expo. The Conference themed Promoting Cooperatives for Sustainable and Inclusive SME Development, brought together key stakeholders from the sector to discuss how to best promote cooperatives as a tool for sustainable and inclusive SME development. The stakeholders present included the entrepreneurs, SME and MSME associations, development partners, academia and government. The government was represented by Hon. Simon Kiprono Chelugui, EGH, Cabinet Secretary for Cooperatives and Micro, Small, and Medium Enterprises Development and Hon. Moses Kuria, Cabinet Secretary, Ministry of Trade.
In his opening remarks, Dr. Vincent Ogutu, Vice Chancellor of Strathmore University noted the University’s commitment to supporting entrepreneurs. “In our approach to transforming the society through the development of international trade, we have embraced MSMEs through training, research capacity building, innovations, partnerships and engaging with partners,” he said. He further urged all the participants to engage, make bold statements, ask questions and come up with solutions that will in turn change the ecosystem.
The President of Kenya, H.E. William Samoei Ruto, in his speech read by Hon. Chelugui affirmed the government’s commitment to developing strategic approaches to support cooperatives and SMEs in partnership with key stakeholders; County governments, academia, research institutions, development partners and MSME associations. “This will enhance capacity building, access to finance and markets, technology acquisitions and transfer, e-commerce and promotion of social entrepreneurship,” read the speech in part.
The Kenya Small Business Development Centers Program (Kenya SBDC), funded by USAID Kenya and implemented by Strathmore University Business School (SBS) champions both public and private-sector-led development to enable MSMEs to participate fully in the economy and create jobs,” Dr. George Njenga, SBS Founding Dean noted. This Program aims to empower MSMEs at the County level with free offering long-term technical assistance to increase their competitiveness. The Program is ongoing in Nairobi, Kiambu, Kisumu, Isiolo, Mombasa, Makueni and Nakuru Counties.
Marc Dillard, Deputy Chief of Mission, US Embassy Kenya, speaking on the Kenya SBDC Program noted that the Small Business Development Centers have been successfully implemented in America for 20 years. “Kenya is the first country to implement the SBDC program, and we hope it will impact thousands of MSMEs,” he noted.
George Wachiuri, CEO Optiven, speaking on behalf of the MSMEs highlighted three key ways in which the government can support MSMEs; tax incentives for start-ups, remaining the hustler fund to patient capital and encouraging local manufacturing.
The SME Conference and Expo 2022, enabled the triple helix of government, industry, and academia operating in the context of an entrepreneurial university to facilitate the policy process within a dynamic national innovation system. At the end of the conference, it was clear that there were interventions that had to be put in place and implemented for MSMEs to continue growing sustainably and inclusively.
The Strathmore Enterprise Development and Innovation Center (SEDIC) is the entrepreneurship arm of Strathmore University. At SEDIC, we undertake training and capacity building for entrepreneurs at all stages of the entrepreneurial journey. The aim of our training programmes is to equip entrepreneurs with relevant skills, knowledge and insights in the sector to strengthen their business acumen skills. Learn about about SEDIC here.
This article was written by Juliet Hinga.
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