Lack of management skills is the biggest challenge hindering development of the informal retail sector in Kenya, a baseline survey has revealed.
The survey by TechnoServe says informal retailers could grow profits and revenue by double-digits if stocking, product placement and record keeping were properly done.
When these small retail shop owners were trained, they were able to increase their revenues by 44 per cent, and profits by 55 per cent, while creating over 190 new jobs over a three-year period. Key skills required include shop management practices, supply chain management and financial management. The study, whose findings were released yesterday, reveals that only 10 per cent of the retail store owners in Nairobi have received any kind of business training. As a result retail shopowners have inadequate business skills to manage their business effectively.
According to the report since July 2017, about 645 working capital loans worth Sh7.9 billion ($78,357), has been disbursed, 85 per cent of the SMEs’ repeated loan process. There was only three per cent of the non-performing loans (NPLs) – six per cent better than industry average of nine per cent – and participating SMEs recorded an average 82 per cent increase in revenue.