Category: Business Daily

The World Bank has asked Kenya to consider additional consumption taxes like excise duty and value added tax (VAT) to clear mounting supplier arrears in what could spark fresh social unrest if adopted.

The multilateral lender wants high consumption taxes to clear pending bills, which rose to Sh526 billion in June from Sh421.6 billion in March, triggering business closures, layoffs and non-performing loans.

The KCB Group fired 34 employees in the year to December over allegations of fraud and professional negligence.

The bank’s latest sustainability report, released on Tuesday, shows the sackings in the wake of fraud jumped from 11 cases in the year to December 2023.

The value of unroasted coffee shipped out of Kenya by exporters almost doubled to Sh35.4 billion during the first six months of this year, compared to Sh19.3 billion realised during a similar period in 2024 spelling a boon for farmers in the coming months amid ongoing reforms in the sub-sector.

Data from the Kenya National Bureau of Statistics (KNBS) shows that this year’s spike bucked a sustained falling trend observed since the period between July and December 2023, when the value rose to Sh23.1 billion, up from Sh21.3 billion during the preceding half.

The Central Bank of Kenya (CBK) has followed its previous seven rate cuts with a further 0.25 percentage points reduction in the benchmark as it seeks to further aid the recovery of lending to businesses and households.

CBK’s benchmark lending rate, the Central Bank Rate (CBR), has eased further to 9.25 percent from 9.5 percent, making it the eighth consecutive interest rate cut by the monetary authority since August 2024.

Cabinet Secretary for the National Treasury John Mbadi while speaking in Mombasa set out a bold objective; to achieve an investment grade rating.

A sovereign credit rating is an opinion on the country’s likelihood of defaulting on its loans. An investment grade rating such as BBB means a very low risk of default.

Most companies and industries talk about ecosystems within their sectors. When they do so, it seems as if they are firms that are merely a crowd of stakeholders orbiting a popular theme.

Researcher Ron Adner famously asks practitioners to see something more precise within company and industry ecosystems.

He treats an ecosystem as a specific alignment of many stakeholders who all need to work together for a singular purpose. The purpose involves generating value that shows up in the real world through impact and/or profit in the pockets of shareholders.

That mental shift in how to view ecosystems matters. It moves the focus from who is connected to whom to instead what activities must be lined up, in what order should they be, and with which handoffs so that customers receive the benefit intended.

Viewing ecosystems through this lens is simple and very practical. Start off with your value proposition. Then list all your activities that must happen so that the promise to customers becomes real.

Next, identify the internal stakeholders who will do those specific activities. Mark their positions in the process maps and flow charts.

In so doing, map the links where information, materials, money, or influence must move between them.

When you as an entrepreneur or leader do this, you can see whether internal stakeholders and partners are merely present or actually aligned. Being present is easy.

Attending meetings or committees is easy, but often does not add value. Alignment, on the other hand, is the hard part that makes or breaks the outcome of most organisations.

Ron Adner points out that true ecosystems become multilateral. Firms do not exist merely as many separate one-to-one relationships between individuals that is difficult to manage in isolation.

A change in one part of an ecosystem can quietly and quickly undo agreements somewhere else. That is why managers frequently get surprised when a plan looks solid in each bilateral contract yet still stalls out in the field with the clients. The hidden cause is misalignment across the whole chain of activities within an ecosystem.

In as much, two practical risks show up often. The first involves co-innovation risk, which is when an internal stakeholder or partner may want to help but still needs time, tools, or talent to deliver their part. Then the second incorporates adoption chain risk.

An internal stakeholder or partner can deliver but may not see enough selfish benefit to make your priority match with their priorities.

A good ecosystem strategy specifically and overtly names such priority alignment risks early and then budgets time and support to reduce them. Think about your current role. How often does such a discussion occur in your management meetings?

Roles also greatly matter. Every firm needs its own ecosystem strategy that says exactly how it will approach internal stakeholder and partner alignment and secure its place in the system.

Sometimes you lead and set the sequence and rules while other times you follow a credible lead and win by moving fast inside a clear plan. Either way, success depends on willing followership across the stakeholders and partners that sit off your direct path to the customer.

While critical individuals may not report to you, yet their choices decide whether your customer promise lands or fails.

Such an ecosystem view is different from platforms, supply chains, or simple networks.

Platforms only focus on access and governance around a hub, while supply chains focus on reliable bilateral flow, and network maps focus on who is tied to whom.

The ecosystem as a structure view focuses on the activity blueprint that creates value, across many parties, where no single hub controls all the organisation’s moves. It is a complement to classic competitive strategy and corporate strategy.

Where competitive strategy hunts for advantage, ecosystem strategy hunts for alignment and is tragically left out of most strategy documents and planning.

Here is how our leadership teams in Kenya can put ecosystem ideas to work. First, write the value promised to customers in one clear sentence that a customer would recognise and find pleasing. Second, sketch the activity map mentioned above from left to right. List the individuals and departments who must act, including those who are not your suppliers or buyers but still gatekeep the outcomes.

Third, highlight and mark the fragile links where a yes from one party depends on a yes from another party. Those are your organisation’s adoption chain risks.

Fourth, name the role you will play and who must follow you on down the chain. If leadership is unclear, then convene a short alignment session that sets sequence, responsibilities, and proof points for each party.

Then thereafter manage the work within the ecosystem with objective realism. Fund the stakeholder and partner tasks that unlock the next gate, not just your own tasks.

Share simple dashboards that show progress on joint activities across multiple individuals and department, not only your own internal milestones on the dashboard.

Then stage launches so that the pieces that rely on outside adoption come online only after downstream readiness is real and not just assumed will be there like how many entrepreneurs optimistically think.

Reward your team for moving external partners into position within the ecosystem, not only for building internal features.

In summary, the payoff for ecosystem thinking involves fewer ugly surprises and faster time to get real impactful work moving.

When you treat the ecosystem as a structure to align and not just a community to sit back and count, then you see the work that actually creates value for your customers. You give your teams a plan that matches how the world outside your walls really works

Small and medium enterprises (SMEs) are the backbone of the global economy, accounting for the majority of businesses and generating over 50 percent of jobs worldwide. This makes them an essential driver of economic growth.

Yet, most entrepreneurs who start a business lack the knowledge needed to operate it successfully. This, coupled with limited access to capital, remains a key obstacle to the growth and sustainability of SMEs-especially in Africa and other developing regions.

As financiers continue to improve access to capital for SME entrepreneurs, it is crucial that they also provide technical assistance to increase their chances of success. Technical assistance-expertise, advice, and support aimed at resolving operational challenges, building capacity, or improving business processes-can be the difference between stagnation and sustainable growth.

However, technical assistance is not a one-size-fits-all service. Since SMEs differ in the products and services they offer, they also face unique challenges and have distinct ambitions.

This means that technical assistance must be tailored and customised to each SME’s specific needs to yield meaningful results in the long term. Despite its value, technical assistance is not always welcome or easy to implement. Financiers often encounter resistance from SME owners who seek financing alone.

This resistance often arises from a lack of understanding of what technical assistance entails, as well as fear of the changes that may result from such interventions.

Additionally, because technical assistance is typically offered on a cost-sharing basis-where the owner contributes a portion of the cost to ensure alignment-many entrepreneurs prefer to allocate those funds elsewhere, such as purchasing software or equipment.

To overcome this resistance, financiers should engage SME owners in visualising the bigger picture of what their business could become when financial support is combined with technical assistance. When well positioned, technical assistance can be catalytic, particularly for businesses facing a wide range of operational challenges.

The most effective interventions are often gradual, with disbursements linked to progress, milestones, and frequent adaptations over time.

For high-impact SMEs, areas such as corporate governance and human capacity development are often the most pressing, particularly because many of these businesses are family-owned and operated.

The availability-or absence-of the right type of technical assistance can determine whether an SME thrives or fails. When coupled with access to capital, tailored technical support opens doors to critical resources and strengthens business resilience.

Together, these twin pillars-financing and technical assistance-form the foundation for sustainable SME growth, job creation, and broader economic development.

We also structure the funding in such a way that they do not feel the pinch as they pay for the technical assistance. With time the SMEs we work with see the value of technical assistance as they are also able to identify the gaps in their business operations and more often than not even request for more of it.

GBF works with a network of experts to provide the specialized technical assistance that is required across board from legal to regulatory support and others. One of the challenges SMEs have is that they start to raise money when it is too late. There is a need to start fundraising early considering the time it takes to get the right funder and to complete the process.

Additionally, it takes money to make them look attractive to a funder yet that is what they are looking for.

Our technical assistance also looks at this aspect to prepare the SMEs to start fundraising for the next refinancing that they require to grow the business.

This means teaching them to be fundraisers and to fix the operational issues they have by putting in the right processes and structures in place to enable them qualify for funding.

For many years, growth in Kenya’s financial services sector was driven by physical expansion. Banks competed to grow their branch networks and increase headcount, with many prioritising scale.

However, the underlying economics of banking have recently evolved with today’s customers demanding performance, seamless service, quicker responses, and meaningful access, as opposed to physical presence.

In response, restructuring physical presence has become a critical element in the strategy of forward-looking banks that recognise the need to align with these new market realities.

When implemented effectively, branch restructuring enhances speed of service, accountability, and relevance to the customer, essential for strengthening the balance sheet, profitability and cost of service for a bank.

Achieving this transformation requires a careful assessment of one’s distribution models.

Across Kenya, mobile money and agency banking have changed how customers consume financial services. While physical infrastructure still plays a role, it must now integrate with digital platforms and community-based channels.

In this new environment, a smaller, more intelligent network can often deliver better results than a larger, less agile one. Indeed, accessibility and ease of transacting, rather than geography alone, define proximity in the modern context.

For example, we at Faulu Microfinance Bank have invested heavily in digital-first transformation, expanding online services to reach more customers across Kenya.

Equally vital is the rethinking of human capital, as banks can no longer operate with rigid hierarchies and siloed teams.

Success increasingly depends on institutions that empower agile, tech-savvy professionals who can make decisions closer to the customer.

As automation handles more routine tasks, the real differentiator from now on becomes the ability to address problems and deliver value in real time.

The bank has rolled out tools such as the digital field agent tool to empower staff to deliver banking services digitally at the customers’ premises to realise this evolution.

However, distribution model restructuring must remain grounded in customer outcomes. Internal changes often fall short when they fail to improve the client experience.

Streamlined structures, smarter systems, and reduced costs are only meaningful if they result in faster onboarding, simpler transactions, and greater trust. The most important question today is not whether a process is efficient, but whether it better serves the people it was designed for.

Meanwhile, even as banks continue to innovate, they must remain critically aware that competition in the financial sector is intensifying.

Fintechs, mobile operators, and other non-traditional players are offering services that not only rival those of established banks but frequently outperform them. These challengers benefit from their focus and flexibility, unburdened by outdated systems or institutional inertia.

Against such realities, banks that delay restructuring risk falling behind, resulting in eroded market share and heightened cost of change.

Those that act early, with clear goals and disciplined execution, however, have the opportunity to gain both efficiency and renewed relevance.

Kenya will save $215 million (Sh27.79 billion) annually after converting its three dollar-denominated standard gauge railway (SGR) loans to yuan, with repayment in the Chinese currency set to start in January next year.

Treasury Cabinet Secretary John Mbadi on Tuesday said Kenya had already converted most of the dollar-denominated loans owed to Beijing to Chinese yuan, paving the way for the country to switch from the expensive floating, dollar-based interest rates.

There is no shortage of corporate leaders eager to talk about the future of work. The conversations are almost always filled with buzzwords-AI, automation, blockchain, digital transformation.

These discussions, while important, often expose a strange irony: many of the same organisations preaching about the workplace of tomorrow are struggling to manage the basics of the workplace today in Kenya.

Take recruitment, for example. Leaders will speak on panels about AI-powered HR tools, yet insist on receiving job applications through generic email addresses. Companies invest heavily in futuristic technology platforms, but in the same breath track how much milk and sugar their staff consume. They talk of remote work while simultaneously denying their staff time off. The disconnect is glaring. You cannot convince employees that you are ready for the work of 2030 when you are still operating with practices stuck in 1990.

Preparing for the future of work is essential, but it cannot come at the expense of the present. A thriving workforce today is the foundation for any transformation tomorrow.

Employees are asking for fairer pay, humane workloads, and real opportunities to grow. Consumers are demanding authenticity, consistency, and respect. Communities are seeking responsible corporate citizens who invest not just in profits but in people.

Technology should be an enabler, not a distraction. A company rolling out AI chatbots to serve customers while delaying salary reviews or neglecting basic wellbeing programmes will eventually face credibility issues.

The workforce notices the gap between leadership’s grand vision and their lived experience. Future readiness is critical, but if current realities are left unattended, the future will arrive on shaky foundations. The excitement about tomorrow quickly fades when today feels broken.

This is why the future of work conversation cannot remain an exclusive leadership agenda. It must be a shared vision that includes employees, customers, partners, and communities.

The future of work is not only about machines and algorithms but also about the relationships that hold organisations together. Leaders who create space for dialogue, who listen to frontline workers as much as they listen to consultants, will find their future strategies grounded in reality. The truth is, no one doubts the potential of AI and emerging technologies. They will reshape industries in ways we are only beginning to understand. But focusing only on what’s coming risks alienating the very people expected to make that transition a success.

Employees need to see that leaders can balance innovation with empathy, progress with fairness, and vision with practicality. A company that builds tomorrow while ignoring the needs of the present risks creating a glossy vision that collapses under the weight of unhappy employees and disillusioned stakeholders.

The future of work should excite us. But it should not blind us to the realities of today. A forward-looking strategy means nothing if the present workplace is broken. The future of work is not just an agenda for the boardroom.

It is a lived reality for the people inside and around the organisation. Technology will play its part, but humanity will remain the heart of work.

Companies must invest in the tools of tomorrow while ensuring the people of today are thriving. That balance-between future ambition and current responsibility-is what will define whether workplace transformation truly takes root.