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Jan 09, 2019

Looking into some barriers facing green-growth enterprises in Kenya

The green entrepreneurship ecosystem in Kenya is dominated by young, educated and enthusiastic individuals with a hope for better world, stable businesses, and a desire to be their own bosses. They hail from various sectors including agribusiness, cleantech, renewable energy and water management. Over the past few years, these enterprises have created and adapted technologies and solutions to solve some of Kenya’s greatest sustainability challenges.

Related article: The journey of an entrepreneur

The role of green-growth enterprises in Kenya’s sustainable development journey is especially important at this moment when investment in solutions to combat the country’s climate challenges is high, as well as a public necessity. Building on this progress, Kenya’s green-growth entrepreneurs require support to jump over the barriers that are hindering their growth as they attempt to respond to Kenya’s climate threats.

Based on my experience and observations within Kenya’s green-growth enterprise space, these are some overarching barriers that ought to be brought to our attention as we seek to strengthen the capabilities of green-growth enterprises in Kenya:

Majority of solo green entrepreneurs in Kenya do not have co-founders to assist them in building high-growth sustainable enterprises. Again, the skills gap in Kenya limits most sustainable enterprises from reaching their full potential. While entrepreneurs are generally highly skilled, most of their value tends to lie in technical areas, without adequate business savviness required to advance their concepts and technologies beyond the ideation and early stages.

Lack of adequate policy support to green-growth enterprises in Kenya. In my recent analysis, the policy aspects of sustainable entrepreneurship remain relatively new in Kenya. Again, we are yet to develop a comprehensive framework for roles of various stakeholders within our ecosystem. We are dragged down further by misconceptions about the profile of green-growth entrepreneurs, thus, hindering the evolution and maturity of the ecosystem.

Mentorship is a very critical component in the growth of entrepreneurs. However, finding solid vested mentors in Kenya to guide sustainable entrepreneurs through all phases of the growth cycle is difficult. At Kenya Climate Innovation Center, we have made it a priority to enhance entrepreneurs’ access to mentors by cultivating a culture “giving-back” in our climate entrepreneurship ecosystem. Despite the progress, majority of young green entrepreneurs still view senior entrepreneurs as unwilling to mentor them. Women green-growth entrepreneurs would really benefit from a dedicated support and mentorship because of the overarching inhibiting factors that deters their success in sustainable entrepreneurship including cultural expectations (including social and familial responsibilities) and; a lack of access to information, networks, and financing.

Kenya’s green-growth enterprise ecosystem is growing but is facing a serious challenge of fragmentation. Despite the efforts in establishing government institutions to link green enterprises with opportunities and support, a disconnect still exists within the ecosystem due to inadequate communication among the key players- mainly the government and the private sector. This blurred path of engagement has resulted in lack of sufficient support for sustainable entrepreneurial activities in the country.

Green growth entrepreneurs lack adequate later-stage support. The general consensus among majority of Kenya’s green entrepreneurs is that early-stage support exists, however, it requires stronger connections in the ecosystem, as well as upgrade of existing infrastructure and quality. It is also evident that the support a sustainable entrepreneur can receive currently has its limits. Despite the presence of incubation and acceleration services, it is still difficult for many sustainable entrepreneurs to fully scale their businesses in the absence of robust financial support at later stages.

Inadequate market access is another impediment to sustainable entrepreneurs in Kenya. Despite a recent study which revealed that the demand for sustainable products in Kenya is 57%, majority of sustainable entrepreneurs find the Kenyan market to be small and difficult to access with opportunities perceived to be reserved for larger, more established firms.

Majority of sustainable investments in Kenya are supported by foreign grants and foreign angel investors who are not able to fully accommodate the ever-growing green start-ups. Funding is further limited by risk-averse local investors, hence the entrepreneurs have to rely on self-funding at the early-stages. This funding barrier is also enhanced by inadequate number of risk appetite among investors who are commonly viewed as only seeking stable investments. Accordingly, it is common to find many Kenyan investors investing in real estate rather than in a green start-up venture.

 

Although the opportunities of growth for Kenya’s sustainable entrepreneurs are on the rise, stronger green-oriented entrepreneurship-related policies and support to the ecosystem is a must as a first step to addressing the above challenges. Such concerted support would help enhance the environment for green-growth entrepreneurs, and unlock the full potential of Kenya’s sustainable development agenda.

 

By: Zachary Mikwa 

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