Kenya to Establish State-Backed E-Commerce Platform for Small Businesses
Kenya has launched a feasibility study for a potential state-backed online marketplace for micro, small, and medium-sized enterprises (MSMEs). The project will enable millions of small businesses to access online trade.
According to a statement by Kenya’s State Department for Micro, Small and Medium Enterprises Development, the project is being carried out under the Kenya Jobs and Economic Transformation Project (KJET), a multi-component initiative supported by the World Bank. Accordingly, the government is seeking consultants to evaluate alternatives such as scaling up existing private digital marketplaces or developing a government-led or public-private partnership platform. The government is focusing on how MSMEs, which are the backbone of Kenya’s economy, can be integrated into formal digital commerce channels.
The feasibility study for the state-backed e-commerce platform has been structured to keep multiple implementation pathways open. Within this framework, the option of expanding existing private platforms by identifying policy, financial, and coordination mechanisms through which the government can increase MSME participation is being evaluated.
As part of the project, MSME segments will be profiled. Then, priorities will be determined, and demand for the digital marketplace will be analyzed within the scope of both sellers’ and buyers’ needs. In addition, mobile money use and the digital payment system will also be examined. The study will also evaluate the feasibility of an e-commerce marketplace to be established under government leadership or through a public-private partnership.
Evaluations Will Be Requested from the Consultant for the State-Backed E-Commerce Marketplace
The consultant who will evaluate the planned state-backed e-commerce marketplace in Kenya will be asked to estimate operational and financial costs, identify potential revenue streams, and determine the scale and duration of any public subsidies that may be required. The consultant will also be asked to analyze issues such as governance structures, oversight mechanisms and risk mitigation measures, licensing, registration requirements, consumer protection rules, data protection obligations, cybersecurity standards, dispute resolution mechanisms, and platform accountability.
One of the central components of the study will also be to assess Kenya’s readiness to support broader participation in digital marketplaces. In this context, connectivity and device access, interoperability of digital payments, hosting and cybersecurity capacity, and the effectiveness of last-mile logistics systems that remain uneven across the country will be examined.
According to data from the Central Bank of Kenya (CBK), there are approximately 7.4 million MSMEs in the country. These businesses employ an estimated 14–16 million people. The sector accounts for approximately 40 percent of GDP. Available data also shows that MSMEs in Africa are held back from the digital marketplace due to a lack of operational capacity to use e-commerce platforms and fear of fraud.