Kenya's small businesses are under growing pressure to help address the country's employment challenge, with the government estimating that the economy requires approximately 1.2 million jobs annually as limited access to affordable financing continues to constrain enterprise growth.
Principal Secretary for MSMEs Development Susan Auma Mang’eni has urged securities exchanges across Africa to expand financing opportunities for micro, small and medium enterprises (MSMEs), arguing that stronger access to capital could help businesses expand, create employment and compete in regional and international markets.
Her remarks come as the latest Kenya National Bureau of Statistics (KNBS) Economic Survey 2026 shows that the country recorded 822,100 new jobs in 2025, highlighting the scale of the employment challenge facing the economy.
MSMEs Expected to Drive Job Creation
Speaking during the opening of the Africa Commerce & Industry Summit (ACIS) 2026 at Uhuru Gardens in Nairobi on Wednesday, October 14, Mang’eni said MSMEs would be central to addressing Kenya's annual employment demand.
The PS said the sector was expected to contribute at least 70 per cent of the opportunities, equivalent to approximately 840,000 jobs if calculated against the stated annual demand of 1.2 million.
However, this figure represents a calculation based on the government's estimate, rather than a separately announced employment target. The 2026 Economic Survey shows that informal employment accounted for 716,800 of the 822,100 jobs recorded in 2025, representing approximately 87.2 per cent of the total increase. The figures underline the importance of smaller enterprises to Kenya's employment landscape, although informal employment and MSMEs are not interchangeable categories.
Mang’eni said limited access to affordable financing remained a major obstacle preventing smaller businesses from expanding their operations and competing effectively in regional and global markets.
She called on African securities exchanges to move beyond traditional listing services and help enterprises strengthen corporate governance, embrace innovation, improve productivity and meet the requirements for accessing capital markets.
According to the PS, preparing businesses to raise money through stock exchanges and other capital-market instruments could create alternative pathways to long-term financing, expansion and employment.
IFC Unveils Ksh18.7 Billion Financing Initiative
The push comes as international development institutions and Kenyan financial institutions pursue initiatives aimed at improving access to capital for smaller businesses.
On August 4, 2026, the International Finance Corporation (IFC) announced transactions expected to mobilise approximately US$144.4 million in local-currency lending for Kenyan microenterprises, women-owned businesses and climate-focused enterprises. The initiative involves partnerships with 4G Capital and two local banks.
IFC committed US$24.2 million across the three transactions, supported by US$11 million in financing from the International Development Association's Private Sector Window. The transactions are expected to mobilise approximately US$120.2 million in additional lending to MSMEs. Using an illustrative exchange rate of Ksh130 per dollar, the expected lending is equivalent to approximately Ksh18.8 billion.
IFC said MSMEs account for approximately 90 per cent of businesses in Kenya and employ more than 15 million people. However, it estimated that the financing gap facing the sector was equivalent to nearly 21 per cent of the country's gross domestic product.
The institution identified limited access to affordable credit as a major barrier preventing enterprises from expanding, creating jobs and investing in productivity improvements.
Youth and Women-Owned Businesses Prioritised
Mang’eni also challenged the organisers of ACIS 2026 to prioritise youth- and women-led enterprises throughout the three-day summit.
She reaffirmed the State Department's commitment to working with the Kenya National Chamber of Commerce and Industry (KNCCI), which is marking its 60th anniversary, to strengthen enterprise capacity, expand market access and improve competitiveness.
The PS said collaboration between government, business membership organisations and capital-market institutions was necessary to transform MSMEs into productive, investment-ready enterprises.
The central challenge will be ensuring that financing initiatives translate into accessible capital for businesses that need it to expand and employ more people.
While existing programmes demonstrate efforts to improve access to credit, the latest announcements do not establish how many additional jobs the initiatives will generate.
For Kenyan entrepreneurs, the effectiveness of the government's push will ultimately depend on whether businesses can secure affordable financing, grow sustainably and create employment opportunities.
