Micro, small, and medium enterprises are crucial drivers of economic growth across Africa, accounting for more than 45% of employment and 33% of GDP continent-wide and up to 90% of all businesses in some countries (AfDB, IFC).
In Kenya alone, there are an estimated eight million micro-enterprises operating currently, contributing upwards of 20% of GDP. Approximately half of all Kenyan micro-entrepreneurs are women. Despite the importance of the sector to the continent’s prosperity, many challenges persist including cumbersome and costly licensing and regulatory requirements, lack of access to capital and markets, and lack of business management knowledge and skills. A 2009 survey indicates that only 15% of all Kenyan entrepreneurs have accessed formal entrepreneurial skills training (GEM).
EGF pays particular attention to youth and women entrepreneurs, as both groups have been historically and disproportionately marginalised despite their potential to improve the economic outlooks of their households. Increasingly under this pillar, EGF also seeks to foster innovation among entrepreneurs and other partners to solve challenges that hinder enterprise growth and to support the development and widespread application of new ideas, systems, and technologies.
EGF assumes a two-pronged approach to increasing entrepreneurship and its contribution to economic growth and social transformation:
Entrepreneurship Training Programme: In 2012, EGF launched a two year pilot entrepreneurship training programme in partnership with The MasterCard Foundation, the International Labour Organisation (ILO), and Equity Bank. The programme offers comprehensive training to partnering micro and small entrepreneurs covering marketing, record keeping, costing, business planning, people and productivity, stock control, and buying to increase entrepreneurs’ practical business skills. Training is followed by individualised business mentoring and advisory services to support entrepreneurs in applying elements of the training and best practices to solve problems specific to their business. These elements are further supplemented by peer learning, group mentoring, and the use of electronic media to share additional business tips, advice, and sector trends. To date, the programme has trained, mentored and supported over 11,500 youth, women and emerging entrepreneurs in Kenya.
Innovation: Fundamentally, EGF recognises innovation as a central means to launch, nurture, and scale up Africa’s next generation of commercially successful enterprises. EGF seeks to ingrain a culture of innovation across all of the sectors in which it works, and ultimately to sustain the rapid development of entrepreneurs working in all sectors of Africa’s growing economy. EGF is currently exploring and finalising partnerships with several leading universities, corporations, and multilateral development and civil society organisations to establish business incubation facilities. Incubators will support prototyping, research, and development, and offer access to business mentorship, expert advisory services, training, and knowledge resources. The space will also offer important networking opportunities to improve collaboration among entrepreneurs and to support investor matching to help entrepreneurs secure necessary equity and debt financing. EGF’s Innovation pillar goal is to leverage effective partnerships to scale up over 1,000 small and medium-sized businesses and to support the development and growth of an additional 10,000 entrepreneurs working in diverse industries in the next five years.
Since inception, EGF’s Entrepreneurship Training Programme has trained over 11,500 micro-entrepreneurs in business and financial management skills; the majority of those trained are women and youth.
Those who have graduated from the training programme are now applying their advanced skills, concepts and tools to improve their business operations and growth forecasts in the agribusiness, trade, manufacturing, and service sectors.
The programme has registered impact across all of its indicators, including increased profits, improved business practices, increased utilisation of bank loans, and number of people employed.