Kenyan small businesses have been urged to seal the gaps on business ethics and compliance for their financial growth.
Financial losses of up to Sh.100-500,000 per year are hampering the growth of small businesses due to corruption, according to a Business ethics industry experts.
According to a small business industry analysis on ethics, corruption risks in form of bribery, fraud, tax evasion, embezzlement, extortion, abuse of office, favoritism and procurement related misconduct have contributed to the stunted growth of small business as much as credit access, skills gap and market access.
The analysis was released in a SME Training on Business Ethics in Nairobi, organized by Stanbic Bank Kenya, Invest in Africa and Milestones Resources Solution.
According to Ms. Fatma Elmawwy, CEO, Milestones Resources Solutions, small and medium-sized enterprises (SMEs) partake in corruption because of their beliefs that corruption is part of the way things work in the country.
“SME’s have to stop this mindset and consequently avoid corruption in their businesses. Part of the non-financial training philosophy to SME’s is the importance of understanding the dynamics of non-financial impact to the growth of their businesses. Building ethical business as best practice for growth,” said Ms. Fatma.
According to Ms. Fatma, small businesses are unaware of the long-term hidden non-financial costs of corruption, decreasing staff loyalty and retention, staff involvement in fraud and damage to reliable supply chain relationships and investor confidence.
“Their lack of compliance reduces their legitimacy and economic efficiency, which can be quite high in the long-term. A strategic alliance such as this the Stanbic Bank and Invest In Africa not only goes beyond in educating the small businesses on ethics but creates a one-stop platform for networking and advisory,” says Ms. Fatma.
Stanbic Bank’s recent launch of ‘DADA’ program, a Kshs 2 billion women-only fund, is guiding and supporting women’s journey of business, through financial and non-financial offerings in line with the bank’s homegrown agenda to drive Kenya’s growth.