The government estimates that ongoing protests are costing the Kenyan economy approximately Ksh 3 billion per day, with Micro, Small, and Medium Enterprises (MSMEs) bearing the brunt of the financial damage.
Micro, Small and Medium Enterprise Development Principal Secretary, Susan Mang’eni, said on Thursday that the state is exploring potential partnerships with insurance firms to cushion private sector players from recurring protest-related losses.
Her remarks come in the wake of widespread destruction following the June 25 protests, organized to commemorate last year’s demonstrations. Businesses in at least 25 counties were vandalized, leaving many entrepreneurs grappling with millions in losses and pushing several enterprises to the brink of closure.
“MSMEs are the worst hit, and we are witnessing an alarming rise in the number of businesses shutting down due to destruction and instability,” said PS Mang’eni.
To mitigate the impact, the government is considering new interventions, including subsidized insurance cover for MSMEs and enhanced registration to improve coordination and access to support services.
However, the plan may face hurdles. Data from the Insurance Regulatory Authority indicates that over 60% of MSMEs in Kenya currently operate without any form of insurance, exposing them to devastating risks during political unrest.
At the same time, commercial banks are warning of a likely spike in non-performing loans in the coming months, driven by the destruction of business assets and reduced cash flows across affected regions.
The government hopes that formalizing and insuring MSMEs will help build resilience against future disruptions and stabilize Kenya’s vital informal sector.
Written By Rodney Mbua
