Self Employment in Kenya

All about Self Employment in Kenya, Wages and Salaries and Self Employment in Kenya, Taxes and Laws and Self Employment in Kenya on AfricaPay Kenya

Who is allowed to start their own business in Kenya?

Anybody who is above 18 years old or an adult. An adult is relevant since business sometimes involves making agreements and/or contracts, and the law cannot be administered with people considered to be minors. Also, the law stipulates that a business should be registered, though in practice, self-employment is majorly in the informal sector (or Jua kali as it is known in Kenya) and regulation of informal sector is sometimes hard, so registrations are not 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 a prospective investor start?

Any kind of business is open to any person to start as long as the activities involved are not considered to be criminal by the Kenyan law. But one should carry out some market research to find out more about the kind of business one wants to start. This may include finding out the demand for whatever service or product one wants to offer, where to get cheap but quality supplies, etcetera. This information helps one to understand the business one wants to invest in before one actually gets going.

Is there financial support?

Yes, there is financing of different forms to Kenyans, through government grants to women and the youth, banks, micro finance institutions, and other credit providers. One needs to create a business proposal to secure funding. The funding organisations, especially the government and micro-finance institutions, encourage group applications by entrepreneurs. The funds are given through the groups and the member entrepreneurs become each other’s guarantors and also follow up to ensure that each member pays their loans.

Are there other forms of support available?

The Kenya Government has in recent years promoted entrepreneurship development through formulation of policies favorable to the development of small businesses. Recently the MSEA (Medium and Small Enterprise Authority) was made an authority from a department under the Ministry of Labour, thus becoming 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, all in the 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 all forms of advertising both formal (like local newspapers, television or radio) and informal (like pinning 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 as members. 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 needs 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 most of the employees in the informal sector are family members, which makes it difficult to effect the law and subsequent follow up.)

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