Supporting Micro-Retailer Survival During COVID-19

TechnoServe and the Mastercard Foundation recently launched the Micro-Enterprises Strengthened for Pandemic Adaptation and Resilience in Kenya (mSPARK) program, a one-year partnership to support 28,000 entrepreneurs as they navigate the COVID-19 pandemic and ultimately move toward economic recovery.

Kenya’s micro, small, and medium-sized enterprise (MSME) sector is vitally important, accounting for nearly one-third of the country’s GDP and employing more than eight million people directly and indirectly. Informal retail shops form the bulk of MSMEs and are essential to local communities, providing basic goods and services. They reach populations often overlooked by larger firms, serve as a vital link in food supply chains, and provide economic opportunities in areas where there are few, particularly for young people and women. During the current crisis, micro-retailers have an especially important role to play as trusted leaders and providers of essential goods and services to their communities, which are often lower income, high-density, and at greater risk to COVID-19 and its economic impacts.

However, micro-retailers themselves are also particularly vulnerable to the impacts of the COVID-19 crisis, which is creating new challenges for these businesses. The combination of lockdowns, curfews, and broader economic disruptions has made it difficult for micro-retailers to maintain their sales, source supplies, and operate safely. Without support, many of these businesses will have to lay off staff or close permanently.

Through a mix of financial and technical assistance, the mSPARK program will help 28,000 entrepreneurs—70% of whom will be young people, and 60% women—in and around Nairobi, Mombasa, and Kilifi to keep their micro-retail enterprises afloat so they can continue to serve their communities. The program will target both trade-oriented businesses such as duka shops selling consumer goods, grocers, and small-scale chemists and pharmacies, as well as service-oriented businesses such as eateries, salons, and tailors.

mSPARK is designed to address three urgent, high-priority constraints confronting micro-retailers: 1) a critical need to keep businesses open and adapting their operating model to survive, 2) limited access to finance to cover core expenses and purchasing needs, and 3) supply chain challenges due to disruptions caused by COVID-19. mSPARK will undertake a three-pillared approach to address these challenges:

• Strengthen business survival skills: Using digitally enabled training, the program will equip entrepreneurs with a toolkit of skills needed to adapt their businesses to the current crisis. 
• Link to finance: Working in close collaboration with fintech company 4G Capital, mSPARK will help entrepreneurs access $4.4 million in repayable business grants to cover immediate working capital needs, as well as strengthen their long-term access to finance.
• Address supply chain disruptions: The program will also engage suppliers and distributors of essential goods to strengthen their connections with micro-retailers and minimize disruptions to the supply chain.

With physical distancing and safety in mind, mSPARK will engage all clients through a remote, digitally-enabled approach. Micro-retailers will receive interactive digital training on business survival skills through a combination of text, photos, and short videos via WhatsApp, SMS, and the Smart Duka app. The program will also support micro-retailers to access and adopt digital tools and services such as financial technology solutions and point-of-sales systems that will increase data-driven decision-making and improve the efficiency and safety of their business operations.