At least 5.85 million businesses operating without licenses, KNBS report reveals


A photograph made available on 23 February 2016 shows boda boda, the local name of motorcycle taxi, drivers and their customers cruise without helmets in Kampala, Uganda, 17 February 2016. EPA/DAI KUROKAWA

At least 5.85 million Small and Medium-sized Enterprises (SMEs) across the country are operating without licenses, a recent survey by the Kenya National of Bureau Statistics (KNBS) has revealed.

The analysis, dubbed ‘Micro, Small and Medium Establishment report 2016’, indicates that the country has over 7.41 million active SMEs’ with only 1.56 million SMEs licensed.

‘’The findings of the survey shows that total number of persons engaged was approximately 14.9 million with the unlicensed enterprises contributing 57.8 per cent with paid employees in licenced businesses being 4 million,’’ stated the report.

The survey adds that a majority of the businesses that are not licensed include wholesale and retail trades, business dealing in the repair of motor vehicles and those in the motorcycles sector.

The survey further shows that the total number of employees in unlicensed enterprises stood at 8,617 at the time of survey with male employees dominating accounting for 42.9 per cent of that number.

‘’This indicates that the growth in male employees was higher than those in female employees in unlicensed establishments mostly in wholesale and retail trade, repair of motor vehicles and motorcycles sector,” said the study.

However, the report ranked Nairobi County the leading region in terms of licensed businesses, accounting for 27.8 per cent of the enterprises engaged.

Speaking during the official launch of the Micro, Small and Medium Establishment report 2016, Chair of the Board of Directors at the KNBS, Prof. Terry Ryan said the 57.8 per cent businesses operating without licenses are impediments to the Kenya Revenue Authority’s (KRA’s) set collection target.

“The value of SMEs output is estimated at Sh3.370 billion against a national output of Sh9.971 billion representing a contribution of only 33.8 per cent in 2015,’’ he said.

Principal Secretary for the State department of Planning, Saitoti Torome, while launching the report, said that KRA should work harder to bring the remaining 5.9 million SMEs into revenues bracket.

He said the report is fundamental and will be instrumental in driving the country’s economic recovery, ensuring poverty reduction initiatives and aiding in the attainment of Kenya’s status as an industrialised nation.

SMEs have, for the last few decades, emerged as a highly vibrant and dynamic sector of the country’s’ economy as they provide the mostt employment opportunities at comparatively lower capital cost than large industries while facilitating the industrialization of rural areas.



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