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Table 2-2 – Businesses Identified Challenges to Growth
Table 2-2 – Businesses Identified Challenges to Growth
Key Challenges Detail
Lack of access to finance Small business owners reported difficulties in obtaining loans or grants, in particular when they have little to no collateral – such as capital or property deeds. In addition, individuals eligible for a loan often do not take them, due to concerns around high interest rates. This has been exacerbated by financial implications imposed by COVID-19.
The majority of traders interviewed were members of SACCOs or smaller table banking groups, however, it was conveyed that the funds available are not sufficient and do not provide a reliable finance source. As such, there was an identified need for a sustained method of finance, for instance low interest loans with extended repayment plans.
Transport infrastructure
The poor road network was mentioned regularly in consultations. Several key roads are not paved, including on market access routes, resulting in muddy soils when it rains and frequently impassable sections. For agriculture and retail, this leads to problems in sourcing and distributing goods, limiting the businesses’ capability to trade and operate. Interviewees from the transport sector also identified the inadequate road network as a major constraint, due to damage caused to vehicles by the unpaved routes. Access to utilities Numerous businesses highlighted a lack of access to fundamental utilities. This included a lack of reliable water sources, with businesses often having to purchase water from commercial vendors or dig their own boreholes. Another major cost item identified frequently was electricity and power, with several reporting power cuts due to the absence of a reliable power source.
Lack of capacity and skills
Environmental factors and climate change
Inadequate market infrastructure Several businesses, particularly from the agriculture sector, referred to a lack of training and knowledge as a constraint. There is low literacy on modern farming systems and techniques in Wote, including declining extension services in recent years, while the costs of inputs and productive resources are high. This has resulted in a lack of value chain approach to the agriculture sector. Low adoption of appropriate technologies such as high-yielding crop varieties and modern machinery also means farmers are unable to operate at maximum potential productivity. Issues of both drought and increasingly heavy rainy seasons were identified as impacting the cultivation, storage and sale of agriculture and livestock produce. Several farmers expressed a desire to diversify their produce but lacked the necessary finances and/or training to do so. In addition, multiple farmers alluded to the challenges presented by livestock and crop diseases, which are expected to be exacerbated by climate change. Most local markets lack the basic support infrastructure necessary to operate – such as power connectivity, paved paths, drainage systems, solid waste collection facilities and adequate water supply. This includes issues with muddy paths limiting access when it rains. Respondents also highlighted issues of security at the markets, including theft of goods and unlicensed traders operating outside the market – thus stealing customers.
Inadequacy in storage and processing facilities within continues to constrain the marketability of particularly perishable goods, such as fruits/vegetables, which are also damaged in transit due to poor road conditions.
2.4 Infrastructure Overview
Makueni County’s infrastructure has been assessed and evaluated in its current provision and state to identify strengths and critical gaps. The assessments also reviewed proposed or planned projects, and how they respond to the County and Wote Municipality’s infrastructure challenges. Overall, to address the existing infrastructure challenges and barriers to growth, the Municipality will need to upgrade existing infrastructure and commit to new projects to support economic growth and development. Key infrastructure gaps identified include:
