How the private sector is powering transformation.
Kenya’s “Vision 2030” plan charts a path toward an economically sound, sustainable future—and bringing that future within the reach of all Kenyans will depend on how easily they can access the tools they need to build their businesses and improve their quality of life. But access can take many forms. For small business owners and entrepreneurs, access to finance is key to growth. City dwellers need access to affordable housing so they can raise families in neighborhoods near job opportunities. Farmers rely on access to agricultural markets so they can sell their food while it’s still fresh and receive prompt payment. And all will require access to digital platforms as Kenya establishes a diverse and dynamic economy.
Progress toward many of these goals is already significant, according to Amena Arif, IFC Country Manager for East Africa and Malawi. “Kenya has undertaken important political, structural, and economic reforms that have driven economic growth over the past decade and will continue to do so in the years to come,” Arif says. “By facilitating access to new markets, Kenya’s private sector can power the economy forward during a post-pandemic recovery.”
That development has the potential to influence the region. Because Kenya is the largest economy in the East African Community, accounting for 47 percent of the region’s GDP, several other countries can benefit from “spill-over effects” of Kenya’s growth agenda, according to Jane Mariara, Professor of Economics at the University of Nairobi and the head of the Partnership for Economic Policy.
“Kenya is the gateway to East Africa and has pioneered many initiatives that other countries in the region have and will continue to tap into” Mariara says.
The stories below spotlight four Kenyan companies that are helping to expand access to the markets and tools Kenyans need as the country pursues “Vision 2030.”
Access to finance
Gabriel Muli and Ruth Muindi, cofounders of Elex Products. Photo courtesy: Elex Products.When COVID-19 hit Africa, Gabriel Muli and Ruth Muindi were prepared—mostly. Muli and Muindi, the married cofounders of a Kenya-based company that manufactures and distributes cleaning and sanitation products, had been tracking the pandemic’s spread throughout Asia and Europe since the first headlines about the virus. “We knew Africa was next,” Muli says. In response, their company, Elex Products, created a new product line of hand sanitizers and ramped up production of disinfectants.
Their prescience paid off. When the first COVID-19 case was announced in Kenya, hand sanitizers were sold out within an hour; customers started lining up outside the Elex Products factory daily at 5 a.m. The corporate team adapted fast to demand—establishing mobile money channels so customers could pay electronically, and shifting from in-person product demonstrations to social media advertisements.
But Elex Products was unprepared for the cost of these changes and others—like the need to build a new, larger warehouse—and it needed access to financing so it could expand to meet demand. Elex Products’ application for insurance finance was approved in just three days by Co-operative Bank of Kenya (Co-op Bank), and because the bank was so proactive, “We were able to adapt our business practices and make quick decisions,” Muli says.
For Co-op Bank, which helped Elex Products expand at a critical juncture, outreach to small and medium enterprises (SMEs) is a priority, says Moses Gitau, Head of Business Banking. The bank doubled its efforts during the pandemic by increasing online engagements with its SME customers. “We reached out to our customers to determine what support they required to weather the pandemic,” Gitau says. Since the pandemic posed so many new challenges to small enterprises—but prevented meeting in person—Co-op Bank conducted over 40 webinars in 2020 and 2021 to help its SME customers navigate the crisis.
The bank’s guidance on gaining access to finance kept Elex Products’ growth on track, Muli says. Today, Elex employs 54 full-time local staff (about half of whom are women), 30 part-time staff, and partners with 600 pop-up vendors.
IFC and its Global SME Finance Facility (GSMEF) has offered support to Co-op Bank for 10 years. Throughout the partnership, IFC has helped the bank conduct market assessments and focus group workshops to determine how to better serve its clients; produce data analytics to better shape the business; and create non-financial services. This has helped Co-op Bank gain 130,000 new SME clients since 2018. IFC advisory work has also helped Co-op Bank move most transactions to alternative channels outside the branch offices.
Funding from the GSMEF is supported by the governments of the Netherlands and the United Kingdom. IFC has also provided $290 million in financing to Co-op since 2016 to support the bank’s SME lending and trade program.
Access to affordable housing