Incentives available to Kenyan entrepreneurs

  

Date Posted: 4/17/2012 7:02:47 AM

Posted By: sashoo  Membership Level: Gold  Total Points: 3952

It is now evident in that the Kenyan government is trying to nurture the spirit of entrepreneurship in the country. Various incentives and policies that the government has adopted towards business activities are evidenced by this aspect.

The following are some of the available incentives to help in accelerating the growth of business enterprises and in encouraging aspiring entrepreneurs to venture into business activities.

• Investment Allowances:
These are financial benefits that accrue to entrepreneurs who invest in particular assets required in their businesses. The allowances arise due to tax deductions. Entrepreneurs are entitled to these allowances depending on the assets acquired or building installation.

• Import Incentive Schemes:
The main aim of import incentive schemes is to encourage the formation of manufacturing enterprises through reduction of import tariffs on inputs such as machinery, raw materials, etc.

• Export Incentive Schemes:
They are common for export oriented businesses and industries e.g.incentives for Export Processing Zones (EPZs), duty free imported raw materials, no Value Added Tax (VAT) on exports, capital allowances on the installed machinery - exporters are allowed to claim 20% as export compensation, etc.

• Provision of Industrial Sheds:
The government, through the Ministry of Industrialization, has constructed sheds which are used as operating premises for entrepreneurs. Examples of such sheds are the Nyayo sheds which are meant to cater for the Jua Kali artisans and the construction of Muthurwa hawkers market.

• Friendly Policies:
The Kenyan government formulates and implements policies that are intended to promote trade and industrial development. They include adopting new technology such as the fiber optic cable and advising entrepreneurs and assisting them to identify viable business opportunities. Plans to have SMEs listed at the Nairobi Stock Exchange were finalized at the end of the year 2010. It was aimed at accelerating investment in SMEs and boosting credit facilities that are accessible by SMEs, thereby supporting their continued growth.

• Issuing of Trade Licenses:
A trade license, once given, enables entrepreneurs to operate within a given area. Imports and exports licenses provide viable opportunities to venture in the global market.

• Providing Training Opportunities:
Various government institutions now offer training on entrepreneurship skills. The government has also partnered with private training institutions to provide entrepreneurial skills to entrepreneurs. Examples of such training opportunities are the 1st phase of 2009 Jitihada National Business Plan Competition, which apart from offering invaluable training to all successful applicants to the competition, also gave cash awards to promising entrepreneurs. The top entrepreneur received a prize of Ksh.1million, while the second and third best winners received Ksh.750,000 and Ksh.500,000 respectively. Special awards of Ksh.250,000 each went to the best Woman Entrepreneur and Social Entrepreneur.

• Market and Networking Opportunities:
Networking is the key activity throughout the life of entrepreneurs. It enables them to benefit especially where they network with suppliers, customers and other business associates.

• Provision of Finance:
The government has been actively committed to providing finance to various groups of entrepreneurs. The establishment of the Kenyan Youth Fund and the Women Enterprise Fund is a clear indication of the government’s commitment to ensuring accessibility of credit facilities to both practicing and aspiring entrepreneurs.

• Fiscal and Monetary Policies:
The government, through its fiscal and monetary policies, has been committed to boosting business activities within the country. This has been evidenced through friendly tax system, increasing government expenditure, lowering borrowing rates, combating inflation, etc.

• Reducing bureaucracies and red tape procedures in areas such as issuance of trade licenses is also an effort by the government to give the incentive to entrepreneurs.

• The government’s permission to liberalize trade is yet another incentive to entrepreneurs.

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