Small and Medium Enterprises (SMEs) form the backbone of Kenyan economy, contributing significantly to the GDP and employment. However, many SMEs face barriers to accessing financial services, which hampers their growth potential.

According to a report by the World Bank, only 63% of adults in Kenya have an account at a financial institution, leaving a substantial portion of the population, particularly SME owners, unbanked. This lack of access to formal financial services can limit their ability to invest, manage cash flow, and navigate economic shocks.

Financial inclusion, however, offers a pathway to overcome these challenges. It refers to individuals and businesses having access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.

Here's how SMEs can leverage financial inclusion for growth:

• Improved cash flow management: With access to banking services, SMEs can manage their cash more effectively. This includes opening business accounts, using digital payment platforms, and taking advantage of overdraft facilities when needed.

• Access to credit: Financial inclusion allows SMEs to secure loans for expansion, inventory, or equipment purchases. Banks can assess the creditworthiness of SMEs using alternative data sources such as mobile money transactions, utility payments, and tax records.

• Risk mitigation: Insurance products can protect SMEs against unforeseen events such as fire, theft, or business interruption. This reduces the financial impact of such incidents and helps ensure business continuity.

The Kenyan government and private sector are making strides in promoting financial inclusion for SMEs. For instance, the Central Bank of Kenya's National Payment System Strategic Plan 2020-2023 aims to increase financial inclusion through mobile money and digital payments.

In conclusion, by embracing financial inclusion, Kenyan SMEs can unlock new opportunities for growth. By adopting digital financial services, SME owners can improve their cash flow management, access credit, and mitigate risks – ultimately propelling their businesses towards success.