Be Your Own Boss
Who is allowed to start their own business in Kenya?
Anybody who is above 18 years old - in other words, an adult. Also, the law stipulates that a business should be registered. However, in practice, self employment mainly falls into the informal sector, or Jua kali as it is known in Kenya, and regulation of informal sector is hard so registrations are not often done. Jua kali means “hot sun” in Swahili. It is the term used for informal manufacturing areas in Kenyan towns where mechanics, welders, wood workers and other tradesmen work “under the hot sun” without big workshops or heavy machinery.
What kind of business can I start?
Any kind of business is open to any person as long as the activities involved are not considered to be criminal by the Kenyan law. But one needs to carry out some basic market research to find out more about the kind of business you want to start. Such information may include the demand for whatever service or product you want to offer, where to get cheap but quality supplies, etcetera. This information will help one understand more about the business you want to start – Is it needed? Will you be able to get materials? - before you actually put in your money.
Is there financial support?
Yes, there is financing in different forms, such as government grants to women and the youth, banks, micro-finance institutions, and other credit providers. One needs to come up with a business proposal to secure funding. The funding organisations, especially the government and the micro-finance institutions, encourage group formation by entrepreneurs. Funds are given through the groups and the member entrepreneurs become each other’s guarantors.
Are there other forms of support available?
The Kenya government has in recent years promoted entrepreneurship development through formulation of policies favorable to development of small businesses. Recently the MSEA (Medium and Small Enterprise Authority) became an autonomous body.
Also there is support from international bodies, national associations such as the Federation of Kenya Employers, and numerous small business development stakeholders; there is a concerted effort to reduce unemployment, thereby eradicating poverty.
The government’s introduction of an entrepreneurship development fund with a view to encouraging women and the youth to venture into self-employment is a very generous move.
Can I market my business?
Yes. An entrepreneur can let people know about their business via forms of advertising both formal (like local newspapers, television or radio) and informal (like pinning up posters, or distributing flyers). Internet websites that provide free or cheap advertising can also be used.
Do I get medical aid and pension?
There are voluntary schemes that allow for health insurance and pension offered by government. For instance, the National Health Insurance Fund (NHIF) has a voluntary category open to informal sector or self-employed persons. Also the Retirement Benefits Authority has a pension scheme that allows for voluntary retirement savings.
Can I hire employees?
Yes. Where one employs five or more people, the law requires that this is done legally, and one need to comply with all aspects of work stipulated under the Regulation of Wages and Conditions of Employment Act (cap 229), Employment Act 2007, and other Kenyan labour laws. However, many employees in the informal sector are family members, making it difficult to effect the law and to follow up.
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