The top 100 SMEs survey which recognizes the fastest growing medium-sized companies, carried out this years survey on over 240 medium-sized firms. The outcome revealed that services toppled telecommunications to become the sector with the highest number of growing companies in the 2011 listing of Kenyas top SMEs.
The service sector dominated in terms of revenue and growth. However, construction maintained its position as the most lucrative segment of the economy with an average annual rate of return on equity of 81%. (Return on equity is a measure of how much profits a company generates with shareholders)
Construction was followed closely by services with a return on equity of 58% while transport and hospitality were third and fourth respectively.
Growth of the service and transport sectors is linked to rapid urbanisation and expansion of the middle-class, which has increased the demand for consumer goods.
It was also noted that transport firms posted the highest revenue growth at an average of 48%. Following closely is ICT, hospitality and service with 40, 34 and 34% respectively.
In line with these results, the government announced that it is working on creating one-stop licensing shops to the cut down the costs of doing business in Kenya.
These shops should be operational by the end of next year.
Source: business daily newspaper