The Central Bank of Kenya (CBK) has identified 14 key challenges that businesses in Kenya faced in 2024.
In its latest report prepared in partnership with the Kenya National Bureau of Statistics (KNBS), the Authority highlighted that 51.0% of businesses pinpointed limited access to markets as their primary challenge, overshadowing other significant issues.
The 2024 FinAccess Household Survey, which examined the daily operational struggles of businesses, revealed that high costs of supplies followed closely, with 28.2% of respondents citing this as a substantial barrier to smooth operations. This indicates a persistent struggle with inflation and supply chain inefficiencies.
Access to credit or capital emerged as another major concern, affecting 24.7% of businesses. This highlights a potential credit crunch or overly stringent lending criteria stifling business growth.
CBK Reveals Challenges that affected Businesses in 2024
Similarly, customers not paying on time was cited by 24.1% of surveyed companies, underscoring ongoing cash flow difficulties.
Increased competition was reported by 17.8% of businesses, reflecting a fierce battle for market share in what appears to be an overly competitive or saturated environment.
Further down the list, but still significant, were issues like insecurity at 6.8%, high licensing costs at 6.3%, and difficulties in managing business expenses at 5.8%. These challenges paint a picture of businesses under pressure from both external market forces and internal operational strains.
Also Read:Â CBK Reduces Interest Rate on Loans
On the real estate front, difficulties in finding premises and uncertainty regarding premises were noted by 5.1% and 4.5% of respondents, respectively. This suggests a challenging environment for business location decisions.
Other challenges included taxation (4.0%), supplier closures (3.9%), and staff reliability issues (1.5%), reflecting a broad spectrum of obstacles from regulatory burdens to workforce management.
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Breakdown of challenges faced by businesses in Kenya
| Challenge | Percentage (%) |
|---|---|
| Limited access to market | 51.0 |
| High/Increased cost of supplies | 28.2 |
| Limited access to credit/capital | 24.7 |
| Customers not paying on time | 24.1 |
| Increased competition | 17.8 |
| Insecurity | 6.8 |
| High costs of licensing | 6.3 |
| Difficult paying business expenses | 5.8 |
| Difficulty finding premises location | 5.1 |
| Uncertainty regarding premises | 4.5 |
| Taxation | 4.0 |
| Suppliers closed down | 3.9 |
| Unreliable employees/Staff issue | 1.5 |
| Poor infrastructure | 1.3 |
| Others | 7.1 |
How Kenyans lost Money in 2024
The CBK also released a data of how Kenyans lost money in 2024.Â
Also Read:Â CBK Reveals Banks with Cheapest and Most Expensive Loans
According to the Authority, majority of Kenyans lost money through fraudulent activities in banks, mobile banking, SACCOs, mobile money, pensions, and microfinance institutions (MFIs), among others.
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