14th-Nov-2025 • Mohamed Hassan • Financial Inclusion
Small and Medium Enterprises (SMEs) form the backbone of Kenya's economy, contributing significantly to the nation's GDP. However, many SMEs face challenges when it comes to accessing financial services, a situation known as financial exclusion. This article aims to shed light on this issue and provide actionable insights for SME owners seeking to overcome these barriers.
Financial exclusion can hinder the growth and sustainability of SMEs, making it difficult for them to invest in new opportunities, manage cash flow effectively, or weather economic downturns. A 2019 report by the World Bank revealed that over 70% of SMEs in Kenya were unserved or under-served by formal financial institutions.
Technological advancements have opened up new avenues for financial inclusion. Platforms like Lipabiz offer digital business management solutions, including payments, invoicing, and cash flow management tools, tailored to the needs of SMEs. These platforms can help level the playing field by providing easier access to financial services.
Mobile money has been a game-changer for financial inclusion in Kenya, with over 90% of adults having a mobile money account as of 2019. By leveraging mobile money services, SMEs can make and receive payments more easily, reducing their reliance on cash transactions.
A strong credit history is crucial for SMEs seeking to secure loans or credit. By maintaining timely repayments and minimizing debt, SME owners can improve their creditworthiness, making it easier to access financial services in the future.
Collaborating with other SMEs or joining business networks can help SME owners pool resources and share knowledge, potentially opening up new opportunities for financial inclusion. For instance, group savings and loan schemes (also known as chama groups) are popular in Kenya and have helped many SMEs access credit.
While challenges remain, the future of financial inclusion for Kenyan SMEs looks promising. With the right tools and strategies in place, SME owners can overcome barriers to accessing financial services, paving the way for growth and success.