For Shopkeepers, a New Path to Recovery from the COVID-19 Crisis
TechnoServe and the Mastercard Foundation are partnering on a new program to support entrepreneurs in Kenya as they navigate the COVID-19 crisis and ultimately move toward economic recovery.
Florence Muthoni makes a living selling produce, bread, and other consumer goods out of her small shop in Juja, Kenya. Her business is strategically located near a local university, so that in normal times, she has a steady flow of customers. However, when the Kenyan government closed all learning institutions to slow the spread of the coronavirus, Florence’s customers also disappeared.
“I have stopped selling vegetables, fruits, and bread — the sales have gone down at the moment,” she reports. “Some customers have purchased items in bulk from supermarkets and wholesalers with the fear of a lockdown.”
Around the world, the COVID-19 pandemic has brought unprecedented uncertainty and challenges for small business owners like Florence. In Kenya, the containment measures put in place by the government, which include travel restrictions and curfews, have led to supply-chain disruptions that directly affect micro-retailers. These disruptions have led to reduced working hours and lower consumer demand, which have resulted in lower incomes for many retailers who already survive with little to no savings.
In response, TechnoServe and the Mastercard Foundation are launching the Micro-Enterprises Strengthened for Pandemic Adaptation and Resilience in Kenya (mSPARK) program, a one-year partnership to help 28,000 entrepreneurs respond to COVID-19.
“Micro-enterprises form the backbone of so many communities in Kenya, but they are facing a moment of real crisis due to the COVID-19 pandemic,” says Alice Waweru, TechnoServe’s mSPARK program director. Kenya’s micro, small, and medium-sized enterprise (MSME) sector accounts for nearly one-third of the country’s GDP and employs more than 8 million people directly and indirectly. Informal retail shops form the bulk of MSMEs and are essential to local communities, reaching populations often overlooked by larger firms, serving as a vital link in food supply chains, and providing economic opportunities in areas where there are few, particularly for young people and women.
By combining financial support with timely technical advice, the mSPARK program is designed to help 28,000 entrepreneurs — 70% of whom will be young people, and 60% women — in and around Nairobi, Mombasa, and Kilifi to keep their micro-enterprises afloat and continue to serve their communities.
Using digitally enabled training, the program will equip entrepreneurs with a toolkit of skills needed to adapt their businesses to the current crisis. The program will also engage suppliers and distributors of essential goods to strengthen their connections with micro-retailers and minimize disruptions to the supply chain.
In partnership with fintech company 4G Capital, mSPARK will help entrepreneurs access $4.4 million in repayable grants to cover immediate working capital needs, as well as strengthen their long-term access to finance. These grants will support overhead expenses such as salaries, rent, and utilities, and will allow micro-retailers to source vital products and digitize their operations.
Elizabeth Jeremiah is a 24-year-old business owner, mother, and wife living on the outskirts of Nairobi. “A repayable grant will be a lifesaving opportunity, as I will have the funds to stay afloat and not have to close down my shop,” she explains. “Being trained on how to navigate through such a crisis will allow me to get out of the crisis better and stronger.”