Lack of knowledge and information holding back Africa’s SMEs
Despite being the engine of most African economies, the majority of small and medium enterprises (SMEs) do not exist long enough to celebrate their fifth anniversary. The entrepreneurs behind these startups are passionate, but more often than not lack basic business skills and experience. So should every other entrepreneur enrol for an MBA? No need.
Kuza Biashara (Swahili for ‘grow businesses’), a Kenyan firm, is building the capacity of SMEs by leveraging web and mobile technologies. The firm has produced more than 100 ‘How to’ videos that entrepreneurs can watch via the web or mobile phones to understand the basics of business management. The two minute videos cover topics on accounting, finance, human resources, sales and marketing, customer relations, technology and general operations.
“We are currently working with more than 5,000 small business owners across Kenya, helping them transform their businesses. We target to have one million SMEs on board by 2015. We aspire to have a presence across Africa in the future since SMEs on the continent face the same challenges,” said Sriram Bharatam, founder and chief mentor of Kuza Biashara.
He explains that the SME toolkit seeks to help entrepreneurs become more professional, understand how to run a business, get access to financing as well as to expose them to new ways of doing things and interact with other successful entrepreneurs.
Bharatam says that in Thailand SMEs contribute to about 42% of GDP. However, in Kenya, the country’s two million SMEs are contributing 75% of the labour force and only 18% of GDP.
“SMEs can create much greater impact on the economy. The lack of exposure amongst entrepreneurs has limited their business growth. We are not here to change the world but to change people, because if we change the people they will change the world,” says Bharatam.
Kuza Biashara also organises workshops both on online and offline platforms and has a team of experts who offer online coaching to its club of entrepreneurs as part of its SME Guru initiative.
Though most entrepreneurs claim lack of access to finance is the biggest challenge they face, Bharatam argues that this is just an excuse and that the real challenge lies in the lack of knowledge and information.
“No matter how much money an entrepreneur has, without knowledge they will not be able to grow [the business]. We have seen entrepreneurs grow their revenues, expand their businesses and hire more people just by changing the way they think and do things. Through mentorship they have been able to cut costs and identify new streams of income. We have shown them new possibilities and opened their minds to new ideas,” says Bharatam.