Small shops in located in Nairobi’s informal settlements can increase profits and revenue by double digit rates through a combination proper stocking, product placement and record keeping, says a Baseline Survey conducted by TechnoServe.
The Baseline Survey found that by training Duka owners in these areas small shops were able to increase their revenues by 44%, profits by 55% while creating over 190 new jobs over a three year period. In addition the entrepreneurs, under the programme, have received over Sh22.7 million in finance. The findings were informed by the Smart Duka programme.
The Smart Duka program is targeting Duka owners, managers, and employees start and grow their businesses through providing business & financial management skills. The skills include shop management practices, supply chain management & financial management. So far, the program has reached over 5300 shops in Mathare, Huruma, Kariobangi, Dandora, Umoja, Kayole, Mwiki, Githurai, Kangemi and Kawangware.
TechnoServe in partnership with Citi Foundation, Elea Foundation for ethics in globalization and the MasterCard Centre for Inclusive Growth (MCIG) through the Smart Duka program has worked with over 5,300 shops located in Nairobi’s informal settlements.
The Baseline Survey further found that only 10 percent of the store owners in Nairobi have received any kind of business training. As a result Duka owners have inadequate business skills to manage their business effectively.
A number of solvable issues prevent the shops from realizing their full business potential which include but not limited to poor cash management, poor layout and product placement, and poor inventory management.
The Kenyan retail sector is the second most developed in Sub-Saharan Africa generating annual revenues of $26b (A.T. Kearney Global Consumer Institute, 2016) and contributes to 30% of Kenyan GDP and 50% of employment (Kenya Vision 2030, 2008).
The retail sector can be divided into informal and formal retail sub-sectors. The informal retail sub-sector is predominantly populated by Micro-SMEs (or micro retailers). Although ‘small’, they generate 70% of Kenya’s retail revenue with 95% of all shoppers frequenting these small businesses, otherwise known as ‘Dukas’, to stock up on day-to-day products (Nielsen 2015).
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