Syndicate content

Kenya

SMEs are good business for Kenya’s growing banking sector

Gunhild Berg's picture


Maasai women make, sell and display their bead work in Kajiado, Kenya. 2010. Photo: © Georgina Goodwin/World Bank

Kenya’s financial sector has expanded rapidly over the last decade and lending to businesses—including small and medium size-enterprises has played a big part. As the Kenyan economy is enjoying a period of relatively high growth, the financial sector’s ongoing ability to channel credit affordably and efficiently to SMEs will be needed to underpin inclusive and sustained economic development.
 
To better understand the SME finance landscape in Kenya, a World Bank-FSD Kenya team embarked on a study with the Central Bank of Kenya to explore the supply-side of SME finance. In addition to quantifying the extent of banks’ involvement with SMEs, the study shows the exposure of different types of banks to the SME market, the portfolio of services most used by SMEs, and the quality of assets. Our report also discusses the regulatory framework for SME finance, the drivers and obstacles of banks’ involvement with SMEs, and their specific business models. 

The reforms behind the Doing Business rankings

Cecile Fruman's picture



In Mozambique in 2003, it took an entrepreneur 168 days to start a business. Today, it takes only 19 days. That kind of transformation has major implications for ambitious men and women who are seeking to make a mark in business, or, as is often the case in Africa, seeking to move beyond a life in agriculture. In economies with sensible, streamlined regulations, all it takes is a good idea, and a couple of weeks, and an entrepreneur is in business.

This week, the World Bank Group launched its annual Doing Business 2016 report, which benchmarks countries based on their progress undertaking business reforms that make it easier for local businesses to start up and operate.

For the second straight year, Singapore topped the list, with New Zealand, Denmark, the Republic of Korea, and Hong Kong SAR, China, coming in closely behind.

In the developing world, standouts included Kenya and Costa Rica, both of which rose 21 positions; Mauritius, Sub-Saharan Africa’s top-ranked economy; Kazakhstan, which moved up 12 places to rank 41st among all countries; and Bhutan, which topped South Asia’s list of reformers. In the Middle East and North Africa, 11 of the region’s 20 economies achieved 21 reforms despite the challenges caused by a number of civil and interstate conflicts.
 
The reforms tracked by Doing Business are implemented by governments, but the results show up most in the private sector, which is critical to driving a country’s competitiveness and to creating jobs. Ensuring an enabling environment in which the private sector can operate effectively is an important marker of how well an economy is positioned to compete globally. 
 
For those of us working with governments to help improve their investment climates – and to create a policy environment in which business regulatory costs are reasonable, access to finance is open, technology is shared, and trade flows within and across borders – the real work begins long before the Doing Business rankings are published.

In the World Bank Group’s Trade and Competitiveness Global Practice (T&C), our mandate is to work with developing countries to unleash the power of their private sector for growth. Much of this work involves reforms in the very areas measured in the Doing Business report: starting a business, dealing with construction formalities, or trading across borders, among other factors.

Our experience working with clients confirms one of this year’s key findings: Regulatory efficiency and quality go hand-in-hand. A good investment climate requires well-designed regulations that protect property rights and facilitate business operations while safeguarding other people’s rights as well as their health, their safety and the environment.

"Every time I see a problem, I create a social business to solve it"

Marta Milkowska's picture

(c) Marta Milkowska“Every time I see a problem, I create a social business to solve it,” renowned Nobel Prize laureate Muhammad Yunus said to an overflowing room at the World Bank Group’s Headquarters in Washington, DC this summer. “Set up a social business.”

“The poor are like Bonsai trees,” the founder of Grameen Bank explained, “When you plant the best seed of the tallest tree in a six-inch-deep flower pot, you get a perfect replica of the tallest tree, but it is only inches tall. There is nothing wrong with the seed you planted; only the soil-base you provided was inadequate. Poor people are bonsai people. There is nothing wrong with their seeds. Only society never gave them a base to grow on."

Development in the digital age

Kaushik Basu's picture
I have spoken only once before at the UN. I was then just a professor and was invited to speak on my research on labor market regulation. I was told it would be a distinguished audience. However, as I got up to speak, almost all distinguished people seemed to leave the room. Only six hardy souls stayed behind to listen to me.

Can we shift waste to value through 3D printing in Tanzania?

Cecilia Paradi-Guilford's picture
A waste collection site in Dar es Salaam, 
Tanzania. Photo: Cecilia Paradi-Guilford
Plastic waste, in particular PET, which is typically found in soda bottles, is becoming abundant in African cities. In Dar es Salaam, one of the most rapidly urbanizing cities in Africa, BORDA found that about 400 tons of plastic waste per day remains uncollected or unrecycled.  Although about 98 percent of the solid waste generated per day can be recycled or composted, 90 percent is disposed in dumpsites.
 
At the same time, the recycling industry has started to grow because of new initiatives, community organizations and private companies. There are a few organizations that repurpose waste into arts and crafts, tools or apply it as a source of energy – such as WasteDar. However, the majority collect or purchase plastic waste from collectors, primarily with a view to export, rather than recycle or reuse locally.
 
Socially and environmentally, waste management is one of the biggest challenges for an increasingly urbanized world. Waste pickers can earn as little as US$1-2 a day in dangerous conditions with little opportunity for advancement. They make up some of the most disadvantaged communities living in deep poverty.

Through a new market for sorted waste materials, these communities may access higher income generation opportunities in a sustainable manner. This presents an opportunity to explore turning this waste into value more close to home.

Energizing our green future

Mafalda Duarte's picture
The CIF is a leader in driving global investments in CSP


​As world leaders come together at the UN General Assembly to adopt new sustainable development goals, climate change activists gear up for Climate Week in New York City and the Pope brings his message to the United Nations, a shared vision of our future is coming into clear focus. 

If we are to eradicate poverty, we need to tackle climate change.  And since 2008, the $8.1 billion Climate Investment Funds (CIF) has been showing it is possible for countries to pursue sustainable development in a way that does just that.

Are citizen-led assessments raising learning levels?

Marguerite Clarke's picture



Citizen-led assessments (CLAs) emerged in India in 2005 as a way to raise awareness and advocacy around low learning levels, and to act as a force for bottom-up accountability and action that would improve education quality and learning. Thousands of volunteers traveled to rural districts and administered simple reading and math tests to the children in households they visited. The dismal results, published in the 2005 Annual Status of Education Report (ASER), helped stimulate debate and prioritize learning in national policy.

Insights from Brazil for skills development in rapidly transforming African countries

Claudia Costin's picture
Young Brazilians learning hairdresser skills under a vocational program run by Sistema S
Young Brazilians learning hairdresser skills under a vocational program run by Sistema S.
Photo credit: Mariana Ceratti/World Bank

While Brazil faces a difficult fiscal and economic situation right now, I would like to view national progress on employment and incomes from a long-term perspective, which is valuable when addressing Education and Human Development issues in a broader sense.

The impact of low oil prices in Sub-Saharan Africa

Gerard Kambou's picture
Growth picked up in Sub-Saharan Africa in 2014, after moderating in 2013, but remained weaker than during the pre-crisis years. It softened around the turn of the year owing to headwinds from the plunge in the price of oil. Sub-Saharan Africa’s oil exporters, which account for nearly half of the region’s aggregate output, have been hit hard by the sharp decline in the price of oil. From June 2014 to January 2015, oil prices fell by nearly 50 percent, and have remained low despite the recent uptick.        
 

Jamaica, Kenya take cues from India on electrifying urban slums

Sunita Dubey's picture
Residents in Wazirpur, India share with us how electricity access has spurred their hope for a better, more dignified life. (Photo by TPDLL)
Residents in Wazirpur, India share with us how electricity access
has spurred their hope for a better, more dignified life. (Photo: TPDLL)
Rarely does one read about a private utility’s successful program to provide electricity to the urban poor. Rarer still is when the program is a profit-making venture and can serve as a learning experience for other countries around the world.
 
But an Indian private utility, Tata Power Delhi Distribution Limited, in New Delhi, has been successful in providing electricity to 217 slums—with 175,000 customers—by engaging with the community. It has reduced non-technical losses and improved its revenues from $0.3 million to $17.5 million over the last five years.

As part of an initiative by the World Bank’s Energy Sector Management Assistance Program (ESMAP) on expanding electricity access to the urban poor, there have been many knowledge exchanges between Brazil, Colombia, Kenya and Jamaica to learn from each other’s experiences and implement best practices. Recently, ESMAP’s team along with delegations from Jamaica and Kenya, visited Tata’s project in India to understand the reason behind their success.

Pages