New Horizons: Accelerating Sustainable Development through Inclusive Business in Kenya

Sustainable Inclusive Business Kenya (SIBKenya) partnered with Business Call to Action (BCtA) to conduct a research on the State of Inclusive Business in Kenya. The report focused on the challenges and opportunities IBs face in Kenya and the extent to which they engage with either of the 17 Sustainable Development Goals. This report highlights opportunities for inclusive business across five sectors: financial services, food and beverages, healthcare, infrastructure and skills building and education. It also shares insights gained from the survey, interviews and workshops on how inclusive business can be scaled to accelerate achievement of the SDGs by 2030.

The following is a summary of the report and what Sustainable Inclusive Business, Kenya looks to offer in this year.

Insights from the Inclusive Businesses

Kenya has a vibrant inclusive business community that is already tapping into the BoP market and contributing towards the SDGs through core business. Scaling up the impact of inclusive business holds great potential for accelerating the achievement of the SDGs.

• Companies engaging in inclusive business are doing so because it makes business sense, providing them with: a competitive advantage, differentiation from competitors; increased profits; and more resilient supply chains.

• These businesses include people at the BoP at various points along their value chains, as suppliers, distributors, consumers or employees.

• Inclusive businesses can easily link their impacts to the SDGs. Most identify with SDG 1: No Poverty in addition to sector-specific SDGs.

• Accessing affordable financing is a challenge for inclusive businesses in Kenya. A lack of access to affordable financing impacts people at the BoP as well as companies seeking to develop and scale their inclusive business models.

• Low consumer awareness in the BoP market also hinders success, requiring innovative marketing and distribution approaches such as leveraging mobile technologies and using shared distribution channels. Companies agreed that inclusive business is best scaled up through partnerships, and business-to-business partnerships are growing in importance.

A variety of opportunities, along with successful and emerging business models, exist across sectors. 

• In the financial services sector, the BoP represents 44 percent of yearly household consumption. Inclusive businesses can tap into under served insurance markets and develop tailored financial products especially for smallholder farmers and micro-entrepreneurs.

• In the food and beverage sector, the BoP represents 91 percent of yearly household consumption, and most Kenyans’ livelihoods are based on agriculture. The sector provides opportunities for building more resilient and inclusive supply chains, including access to financing, inputs, new technologies and agricultural intelligence.

• In the health sector, the BoP represents 71 percent of yearly household consumption. Opportunities in this sector for inclusive business to reach scale by leveraging technology, public-private partnerships and new financing models, and by tapping into new product lines.

• In the infrastructure sector, the BoP represents 75 percent of yearly household consumption. Growing urbanization is increasing the demand for affordable housing, water and sanitation services among people at the BoP, and Kenya has a large off-grid population that needs access to alternative energy sources.

• The skills building and education sector can help Kenya’s growing youth population to become its strength. Inclusive business models that engage low-income communities as suppliers and consumers of educational products and services can help to address the skills gap in Kenya.

To accelerate the impacts of inclusive business on the SDGs, a supportive ecosystem needs to foster dialogue and collaboration in order to lift more Kenyans out of poverty.

• Building awareness and understanding of how inclusive business models contribute to the SDGs is the first step. Measuring the impacts and reporting on also helps to provide a sound evidence base.

• For innovative approaches to succeed, regulations need to be able to adapt at a comparable pace.

• Partnerships and the collaboration of several actors are needed for impacts at scale. For instance PPPs, B2B and Business to civil societies.

 SIB Kenya has a Perspective!

The way forward for inclusive business growth.

Inclusive businesses need to have a mind-set shift. Instead of these businesses regarding themselves as “social enterprises”, they need to regard themselves as a business just like any other and be assertive towards pushing their good agenda in order to penetrate the markets.

Inclusive businesses need to have inclusive operational policies in dealing with their internal customers (suppliers, distributors, stakeholders, creditors etc.) This will create an inclusive ecosystem. If the business is working with inclusive businesses, an atmosphere of inclusivity is created leading to a general awareness creation among peers.

In terms of policies, inclusive businesses need to understand that these policies affect all other business, inclusive or not. They therefore need to drop the “special” feeling and innovate around these policies or lack thereof, considering lobbying to the government is a long process.

Knowledge sharing within inclusive businesses is crucial. These companies can learn from successful strategies and avoid processes from failed strategies. This way, there is less replication of challenges or failures, more growth and B2B support. Rather than unhealthy competition, inclusive businesses are able to create support systems around one another.

Co-ordination of efforts to avoid duplication of inclusive business agendas. Inclusive businesses are also able to focus on their core activity, and leave other works to established experts. For instance, delegation of training and awareness creation, lobbying to apex organizations and development partners who have the capacity, and focus on their business growth.

Connecting to the SDGs is an important element in inclusive business growth. Businesses need to know which role they play in the global agenda, making their efforts more focused.

There is need to include other businesses in the inclusive business definition. Leaving out other businesses who have not “branded” themselves as inclusive businesses is leaving out the impact they make on the BoP.

In Marketing Communication, Inclusive Businesses should communicate in creative ways the need for the product, not only the product. This makes their communication advertise and create awareness at the same time. Responsible communication also attracts investors.

For follow up, questions and engagements please write to llyord@sibkenya.com or karin@sibkenya.com