Our priority is to bridge the gap between large international and domestic companies and smaller local business and increase access to skills, markets and finance.
In mid-2016, Invest in Africa (IIA) and Strathmore Business School partnered to conduct a study aimed at unearthing barriers to growth and investments Kenyan SMEs face. One of the key findings was the difficulty most SMEs have on accessing available business opportunities from larger corporates. On the flipside, big firms often complain about finding reliable and trusted local SMEs that can deliver to meet their standards. In an exclusive interview with StartUp Magazine, Patricia Ithau, IIA Country Director shares about IIA and its vision in the African economy.
These understanding and other intricacies facing SMEs in the country stirred the launch of the IIA in Kenya.
Invest in Africa is a non-profit organization with a vision to create a thriving African economy. IIA partners with private and public sector companies to identify and tackle challenges of doing business in Africa by delivering cost-efficient and impactful solutions.
“We work with other private sector businesses to create better access to skills, markets and finance for local SMEs,” says Ithau. “If you give SMEs a platform where they can access business opportunities, most certainly, they can compete competitively.”
In April this year the firm introduced Africa Partner’s Pool (APP), a platform which provides opportunities for small and big businesses to engage, interact and do business together. According to her, APP facilitates transparent business in a more timely and cost effective manner.
“The platform addresses fundamental barriers to growth of both small and big corporates in our economy, adds Ithau. ”
IIA-Kenya developed APP with support from its global partners Tullow, a team of technical advisors, procurement professionals and ICT specialists.
Besides buying and selling, Ithau confirms that APP is a booming community of businesses. “Our other partners including Equity Bank, Safaricom, Ernst & Young and Strathmore Business School among others who signed a charter committing to support the growth of SMEs by providing commercial opportunities on the APP platform.”
In addition, the platform also contains an information toolkit to share knowledge and skills development that are pertinent to the growth of small businesses.
When Global oil explorer, Tullow came to Africa, they opted to support the initiatives to boost economy and built community where they work. Supporting the growth of SMEs was their best bet because such businesses are the backbone for a thriving economy.
Since its inception in April 2017, about 500 businesses have been validated in Kenya on the platform.
“Anything good, unique and adding value will create interest once introduced to any market. The same can be said of our platform. Kenya is an extremely sophisticated market with diverse businesses driven by tech intervention. With these understanding, we developed a robust platform that meets the market expectations. These among many other reasons clearly explains why we have sparked a lot of interests,” explains the director.
Every business now has a cross-sustainability agenda and developing SMEs remains critical towards sustainability drive.
Small business pay an annual fee of KShs 5,000 to join the platform. The businesses then undergo vetting to ensure they meet the absolute minimum requirements to do business with big corporates. For instance, SMEs must have relevant certifications, be compliant with all the required laws and regulations among others. “Our validation criteria make SME business ready,” points Ithau.
Close to 40 tenders worth millions of shilling have been floated on the platform. Despite being a relevant solution for SMEs to gain visibility and access businesses, the slowdown in the economy and political uncertainty has impacted the reception of the platform for the last three months.
However, expectations are high going forward with belief that business must progress regardless of economic hiccups.
The biggest challenge yet to SME’s using the APP, says the director, is completing the validation forms and process. Sorting out their documentation and governance structures is quite a hassle because they are not compliant on many fronts.
“We want to validate at least 2000 SMEs on the platform by end of 2018. We are also encouraging businesses to give the platform a try and complete their validation processes to enjoy available opportunities,” reveals Ithau.
The firm also plans to have 500 tenders listed on APP by next year.
“Imagine you have thousands of SMEs on the platform and each of them is employing at least ten people. The ripple effect in terms of empowerment of families and their dependants will be huge. This in essence contributes to the Gross Domestic Product of states economy through the taxes. The SMEs will be encouraged to grow; a move that translates to more employment opportunities,” she concludes.