Report On Consideration Of The Micro And Small Enterprises (amendment) Bill, 2025

SNA

31/3/26

REPUBLICOFKENYA

THENATIONALASSEMBLY THIRTEENTHPARLIAMENT-FIFTHSESSION-2026

DIRECTORATEOFDEPARTMENTALCOMMITTEES DEPARTMENTAL COMMITTEE ON TRADE,INDUSTRY AND COOPERATIVES

REPORT ON:

THE MICRO AND SMALL ENTERPRISES(AMENDMENT) BILL(NATIONAL ASSEMBLY BILLNO.25OF2025)

CLERKSCHAMBERS DIRECTORATEOFDEPARTMENTALCOMMITTEES PARLIAMENTBUILDINGS NAIROBI

MARCH 2026

TABLEOFCONTENTS

| LISTOFABBREVIATIONSANDACRONYMS | |-------------------------------------------------------------------------------------------------| | LIST OF ANNEXURES... 5 | | CHAIRPERSON'SFOREWORD 6 | | CHAPTERONE 8 | | I.0 PREFACE .8 | | 1.1EstablishmentoftheCommittee 8 | | 1.2 Mandate of theCommittee. 8 | | 1.3 Committee Membership.. 9 | | 1.4 Committee Secretariat. .10 | | CHAPTERTWO... | | 2.0BACKGROUNDOFMICROANDSMALLENTERPRISESINKENYA. ...11 | | 2.1 Introduction..... | | 2.2 Current Legal andPolicyFramework. .12 | | 2.3 Comparative Analysis... 12 | | CHAPTERTHREE. .13 | | 3.0OVERVIEWOFTHEMICROANDSMALLENTERPRISES(AMENDMENT)BILL (NATIONALASSEMBLYBILLNO.25OF2025) ...13 | | 3.1 Introduction..... .13 | | 3.2RegulatoryFrameworks. ..13 | | 3.3ObjectiveoftheBill. .13 | | 3.4ClausebyClauseProvisionsof theBill .14 | | CHAPTERFOUR... .15 | | 4.0PUBLICPARTICIPATION/STAKEHOLDERCONSULTATIONS. .15 | | 4.1 The State department for Micro, Small and Medium Enterprises (MSMES) Development.....I15 | | 4.2 The National Treasury (TNT) .16 | | 4.3 The Kenya National Innovation Agency (KeNIA). .16 | | 4.4 The Micro and Small Enterprises Authority (MSEA) .17 | | 4.5 Hon.Moses Cheruiyot Rotich ... .17 | | 4.6 The AfricanWomen Studies Centre.. .18 | | CHAPTERFIVE.. .20 | | 5.0COMMITTEEOBSERVATIONS. ..20 | | CHAPTERSIX... .21 | | 6.0COMMITTEERECOMMENDATION. ...21 | | CHAPTERSEVEN.. .22 7.OSCHEDULEOFPROPOSEDAMENDMENTS ...22 | | .23 | | REFERENCES. |

LISTOFANNEXURES

• 1.AdoptionSchedule of the Report
• Minutes
• b) Minutes of the 7th Sitting
• a) Minutes of the I9th Sitting
• Minutes of the Ist Sitting
• 3.Copy of the Newspaper Advertisement
• Copies of the Letters Inviting Stakeholders for the Meeting
• b) LetterRef: NA/DDC/TIC/2026/004 dated I7th February,2026
• 1 (
• 5.A Copy of the Micro and Small Enterprises (Amendment) Bill (N.A. Bill No. 25 of 2025)
• 6.MatrixoftheBill
• 7.Witness Attendance Register for the Stakeholder Engagement Meeting

LISTOFABBREVIATIONSANDACRONYMS

ANC

AmaniNational Congress

Cap.

Chapter

CBS

Chief of the Burning Spear

CEO

ChiefExecutiveOfficer

CS

Cabinet Secretary

DDC

DirectorateofDepartmentalCommittees

Dr.

Doctor

GDP

GrossDomesticProduct

HELB

Higher Education Loans Board

Hon.

Honourable

IP

IntellectualProperty

KANU

Kenya African National Union

KeNIA

KenyaNational InnovationAgency

MP

MemberofParliament

MSEA

MicroandSmallEnterprisesAuthority

MSEs

MicroandSmallEnterprises

MSMEs

Micro, Small and Medium Enterprises

NA

National Assembly

No.

Number

ODM

Orange Democratic Movement

PhD

Doctor of Philosophy

PS

Principal Secretary

PWDs

PersonswithDisabilities

REF

Reference

SEZ

Special EconomicZone

SMEDAN

Small and Medium Enterprises Development Agency of Nigeria

SMEs

SmallandMediumEnterprises

TIC

Trade,Industry and Cooperatives

TNT

The National Treasury

UDA

UnitedDemocraticAlliance

WDM-K

Wiper Democratic Movement Kenya

CHAIRPERSON'SFOREWORD

This report presents the proceedings of the Departmental Committee on Trade, Industry and Cooperatives on its consideration of the Micro and Small Enterprises (Amendment) Bill (National Assembly BillNo. 25 of 2025), which was published on 20th June 2025. The Bill underwent its First Reading on I"t October 2025 and was subsequently committed to the Departmental Committee on Trade, Industry and Cooperatives for consideration and reporting to the House, pursuant to the provisions of StandingOrderI27.

The Bill comprises three clauses and proposes amendments to the Micro and Small Enterprises Act, Cap. 499C. It seeks to expand the mandate of the Micro and Small Enterprises Authority to include functions relating tothe marketing,branding,and development of products and services offeredby micro andsmall enterprises,with a view to promoting their consumption in the local market. Specifically, the Bill proposes to confer on the Authority functions in respect of national branding initiatives, product development, quality and design improvement, innovation support, and advisory services directed at local farm enterprises and consumers. The Bill further provides for the Authority to collaborate with specialised agencies in the fields of innovation and information in the discharge of these expanded functions.

In accordance with Article I18 (1) (b) of the Constitution and Standing Order 127 (3), the Clerk of the National Assembly placed advertisements in the print media on 7th October 2025 requesting for comments on the Bill from the public and relevant stakeholders.Further,through letters referenced NA/DDC/TIC/2026/001 and NA/DDC/TIC/2026/004 dated 1Ith and dated 17th February 2026 respectively, the Committee invited stakeholders to a public engagement session on Thursday 26th February 2026. During this meeting, four (4) stakeholders made oral submissions before the Committee.

In its deliberations, the Committee considered the proposed amendments in light of the comments submitted by stakeholders. Most stakeholders that attended the meeting supported the amendments proposed in the Bill and proposed further amendments to other sections of the Micro and Small Enterprises Act, Cap. 499C.

The Committee wishes to extend its sincere appreciation to the Offices of the Speaker and the Clerk of the National Assembly for the logistical and technical support extended throughout its sessions. We also acknowledge the valuable input from Hon. John Gitonga Mukunji, MP in sponsoring the Bill and all the stakeholders that submitted their memoranda and attended the stakeholder engagement meeting. Lastly, I express my gratitude to the Honourable Members of the Committee and the Committee Secretariat for their dedication and contributions to the development and production of this report.

On behalf of the Departmental Committee on Trade, Industry and Cooperatives, and pursuant to Standing Order I99(6), it is my privilege and honour to present to this House the Committee's Report on the Micro and Small Enterprises (Amendment) Bill (National Assembly Bill No. 25 of 2025).

Having considered the Bill, the Committee recommends that the Bill be DELETED IN ITS ENTIRETY.

Hon.Bernard Masaka Shinali, CBS,MP Chairperson, Departmental Committee on Trade, Industry and Cooperatives

I.0PREFACE

I.lEstablishmentoftheCommittee

• I. The Departmental Committee on Trade, Industry and Cooperatives is one of the twenty Departmental Committees of the National Assembly established under Standing Order 216 whosemandatepursuanttoStandingOrder216(5) is asfollows:
• i. To investigate, inquire into, and report on all matters relating to the mandate, management, activities, administration, operations and estimates of the assigned ministries and departments;
• ii. To study theprogramme and policy objectives of Ministries and departments and the effectiveness of theirimplementation;
• ili. On a quarterly basis, monitor and report on the implementation of the national budget in respect of its mandate;
• iv. Tostudy andreviewall the legislationreferred to it;
• V. To study, assess and analyse the relative success of the Ministries and departments as measured by the resultsobtainedascomparedwiththeirstatedobjectives;
• vi. ToinvestigateandinquireintoallmattersrelatingtotheassignedMinistriesanddepartmentsasthey maydeemnecessary,andasmaybereferredtothemby theHouse;
• vii. Tovet andreport onall appointments where the Constitution or any lawrequires the National Assembly
• vili. To examine treaties, agreements and conventions;
• ix. To make reports and recommendations to the House as often as possible, including recommendation ofproposedlegislation;
• X. To consider reports of Commissions and Independent Offices submitted to the House pursuant to the provisionsofArticle254oftheConstitution;and

12. xi.To examine any questions raised by Members on a matter within its mandate.

1.2MandateoftheCommittee

• 2.In accordance with the Second Schedule to the Standing Orders, the Committee is mandated to consider trade, including securities exchange, consumer protection, pricing policies, commerce, industrialisation including special economic zones, enterprise promotion & development including micro, small & medium enterprises (MSMEs), and small and medium enterprises (SMEs), intellectual property, industrial standards, anti-counterfeit policies and cooperatives development.

3. In executing its mandate, the Committee oversights the Ministry of Investment, Trade and Industry; and the Ministry of Cooperatives and MSMEs Development.

CHAPTERONE

1.3 Committee Membership

4. The Departmental Committee on Trade,Industry and Cooperatives was reconstituted by the House on5th March2025and comprises the following Members:

Chairperson

Hon.BernardMasakaShinali,CBS,MP llkolomani Constituency ODM Party

Vice-Chairperson

Hon. Marianne Jebet Kitany, MP Aldai Constituency

UDA Party

Hon. Adhe Wario Guyo, MP North Horr Constituency KANU Party

Hon. Adams Korir Kipsanai, MP Keiyo North Constituency UDA Party

Hon. Anthony Tom Oluoch, MP Mathare Constituency ODM Party

Hon.Alfred Kiprono Mutai, MP Kuresoi North Constituency UDA Party

Hon. Dr. Beatrice Kahai Adagala, MP Vihiga County ANC Party

Hon. Amos Maina Mwago, MP

Starehe Constituency Jubilee Party

Hon. Joshua Mbithi Mutua Mwalyo, MP Masinga Constituency IndependentMember

Hon.JohnOkano Bwire,MP Taveta Constituency

WDM-K Party

Hon. Joyce Kamene, MP Machakos County WDM-K Party

Hon. Samuel Parashina Sakimba,MP Kajiado South Constituency

ODM Party

Hon.Robert Githinji Gichimu, MP Gichugu Constituency UDA Party

Hon. Michael Wainaina Wambugu, MP Othaya Constituency UDA Party

Hon.Dr.WilberforceOjiamboOundo,MP Funyula Constituency ODM Party

I.4CommitteeSecretariat

• 5.The Committee is facilitated by the followingSecretariat:

Ms. Laureen Omusa Wesonga ClerkAssistantI/Head ofSecretariat

Ms. Carolyne Musyoka

Hansard Reporter Il (Clerk Assistant)

Ms. Doreen Karani Principal Legal Counsel II

Ms. Priscilla Wangu Fiscal Analyst II

Ms.Priscilla Saidi Research Officer II

Ms.Pauline Sifuma Hansard Officer

Mr.Daniel Psirmoi Media Relations Officer Ill

Ms.Florence Wanja

Protocol OfficerIl

Ms. Peris Kaburi AssistantSerjeant-at-Arms

Mr. Kelvin Lengasi Audio Assistant

CHAPTERTWO

2.0BACKGROUNDOFMICROANDSMALLENTERPRISESINKENYA

2.1 Introduction

6. The Micro, Small and medium enterprises (MsMEs) dominate Kenya's private sector and labour market. MsMEs account for the vast majority of private enterprises, provide the bulk of new jobs created annually, and contribute a substantial share of GDP. 7. Several government and sector sources indicate that the MsME economy contributes roughly a third to over 40% of Kenya's GDP. The informal sector (where most micro enterprises sit) is responsible for the majority of jobs in Kenya. 3. 8.The following are the key strengths of micro, small and medium enterprises: 4. a)Jobcreationandresilience:Theinformal/MSMEsectoris thelargestsourceofnon-farm employment and generates most of Kenya's net new jobs in recent years. 5. large supply of potential start-ups and innovators. 6. c)Policy momentum:Recent institutional reform (creation/strengthening of MSEA and new to channel procurement and support to local producers. 9. The following are the key challenges faced by micro, small and medium enterprises:

• a) Access to finance: A persistent and large finance gap remains. Some MsMEs face credit challenges due to small size,lack of collateral,weak credit histories and informality.High interest rates and tighter bank lending (due to fiscal crowding and elevated rates) have worsenedcreditaccess.
• b) High informality: A large proportion of micro enterprises are unregistered or informally operated, which limits access to formal services (finance, training, procurement) and constrains their ability to scale.

10. c)Market access & competitiveness:Weak market linkages,inconsistent product quality andlowbranding/value-additionreduceMSMEs'competitiveness informalpublicandprivate supply chains. 11. d)High cost of doingbusiness/macro headwinds:Elevated borrowing costs,tight private sector credit growth and fiscal pressures(debt servicing)crowd out credit and investment into MSMEs, reducing expansion and job creation potential. The World Bank and others have noted private sector squeeze and lower credit growth.

2.2CurrentLegalandPolicyFramework

SomeofthelegalandpolicyprovisionsthattouchonMSMEsinKenya include

10. Micro and Small Enterprises Act, Cap. 499C establishes the legal and institutional architecture for promoting, developing and regulating micro and small enterprises. The Act sets out the object andpurpose ofMsMEpolicy(an enablingenvironment,access tobusiness developmentservices, formalisation/upgrading, entrepreneurship promotion and representative associations), creates the office of the Registrar of Micro and Small Enterprises and provides for MSEA as the lead implementingagency. 2. 1l. Draft MSME Policy 2025 and a Strategic Plan (2023 to 2027) set out an integrated roadmap on the formalisation and registration, aggregation and common user facilities, value-addition and branding, digitalisation, preferential public procurement and access to finance. The draft Policy explicitly links supply-side interventions (skills, standards, technology) with demand-side levers such 3. 12.Kenya Micro and Small EnterprisesPolicy 2020:The national policy framework targeting finance,formalisationandaconduciveregulatoryenvironment.

2.3 Comparative Analysis

13. In Kenya, the Micro and Small Enterprises (Amendment) Bill, 2025 focuses on expanding the scope from micro & small to micro, small & medium enterprises and strengthen formalisation, market access and value addition. It also empowers MSEA for coordination and development of MsMEs. 2. I4. In Nigeria, the SMEDAN Act, 2003 (and Amendments); Companies and Allied Matters Act, 2020 CAMA;andtheNationalPolicyonMSMEsestablishesSMEDAN asacoordinatingbodyforMSMEs whichfacilitatesformalisationand developmentofmicro,small&mediumenterprises.It also provides regulatory, capacity-building, and financing frameworks. 15. In Australia, the Corporations Act, 200l; the Business Names Registration Act, 201l: the Goods and Service Tax Act, 1999;and the Income Tax Assessment Act,1997,regulate incorporation, procurement. 16. Kenya can adopt the following best practices from Nigeria and Australia that have spent decades refiningtheirlocal contentframeworks: 5. a)StrengtheningcoordinationofMSMEpoliciesunder theMicroandSmall EnterprisesAuthority.

• b) Ensuring all ministries, counties, and development partners align their MSME programs under one framework.

7. c)AvoidduplicationofprogramssupportingSMEs

CHAPTER THREE

(NATIONALASSEMBLYBILLNO.25OF2025)

3.1 Introduction

17. The Micro and Small Enterprises (Amendment) Bill (National Assembly Bill No. 25 of 2025) is sponsored by Hon. John Gitonga Mukunji, MP. It was read a First Time on Ist October 2025 and subsequently referred to the Departmental Committee on Trade, Industry and Cooperatives for consideration and to facilitate public participation pursuant to Standing Order 127. 18. The principal object of the Bill is to amend the Micro and Small Enterprises Act, Cap. 499C to require MsEA to promote the marketing, development and branding of products and services by the micro and small enterprises to enhance their consumption in the local market.

3.2RegulatoryFrameworks

19.TheBillproposesasfollows:

• a) The Bill reinforces the mandate of MSEA as the lead agency responsible for implementing marketing, branding, and innovation initiatives for MsEs. It mandates the Authority to advocate, coordinate,harmonize, and implement national branding policies that promote local products manufacturing.
• b) The Authority will collaborate closely with other national institutions such as the Kenya Innovation Agency, Information and Communication Authorities, and relevant regulatory bodies to advance product development, design improvement, and innovation.
• c) Additionally, the Cabinet Secretary responsible for MSEs, acting on the advice of the Authority, is empowered to make regulations that prescribe mechanisms for product marketing, development, branding, and affirmative action in favour of local enterprises.
• d) As trade development and regulation fall under the purview of county governments under the Fourth Schedule to the Constitution, the Bill also envisages cooperative engagement between the

3.3ObjectiveoftheBill

20.Theobjectiveof theBill isto:

• a) strengthen the capacity of MSEA to promote the marketing, development, and branding of productsandservicesbyMsEs.

• b) enhance the competitiveness and consumption of locally produced goods and services within the Kenyan market.
• c) embed national branding initiatives, provide advisory support for technology upgrading and product innovation, and encourage collaboration among key agencies such as the Kenya Innovation Agency and the Information and Communication Authority to advance product quality anddesignimprovement.
• d) Additionally,the Bill empowers the Cabinet Secretary to make regulations prescribing localconsumptionofMsEgoodsandservices.

3.4 Clause by Clause Provisions of the Bill

• 21.ClauseI of the Bill provides for the short title.

22. Clause 2 of the Bill proposes to amend section 3l of the Act to require MSEA to collaborate with other agencies topromote the marketing,branding andvalue addition of local enterpriseproducts andservices. 23. Clause 3 of the Bill proposes to amend section 74 of the principal Act to require the CS with the advice of the Authority, to make regulations to prescribe the mechanism for development and affirmative action onthelocal enterprises'products andservices to enhance their consumption in Kenya. 24. The Bill delegates legislative powers but does not contain any provisions that limit any fundamental rights and freedoms. 25. The Bill seeks to amend the Micro and Small Enterprises Act, Cap. 499C to require MSEA to collaborate with other agencies to promote marketing, value addition, branding and local a function of county governments. In view of this, the Bill concerns county governments in terms of s recognised in the Fourth Schedule to the Constitution. 26. Enactment of this Bill will not occasion additional expenditure of public funds and it is therefore not amoneyBillwithinthemeaningofArticleIl4of theConstitution.

CHAPTERFOUR

4.0PUBLICPARTICIPATION/STAKEHOLDERCONSULTATIONS

• media on 7th October 2025 and vide letters REF:NA/DDC/TIC/2026/001 dated11th February,2026 and REF: NA/DDC/TIC/2026/004 dated 17ch February, 2026, inviting stakeholders for a meeting, the Committee received memoranda from the following stakeholders on the Micro, Small and Medium Enterprises (Amendment) Bill (National Assembly Bill No. 25 of 2025):
• The State Department for Micro, Small and Medium Enterprises (MSMES) Development;
• ii. TheNational Treasury;
• ili. The Kenya National Innovation Agency;
• iv. The Micro and Small Enterprises Authority;
• V. Hon.Moses Cheruiyot Rotich; and
• vi.TheAfricanWomenStudiesCentre.
• 28.Thestakeholderssubmitted asfollows:
• 4.l The State department for Micro, Small and Medium Enterprises (MsMES) Development

29. In a letter, REF: MC/SD/MSME/ADM/1/95 (44) dated 20th February 2026, the Principal Secretary, Ms. Susan Mang'eni, CBS stated that the amendments proposed to sections 3I and 74 of the Micro and Small EnterprisesAct,Cap.499C entail functions of the Authority and Regulationswhich may not cure the emerging issues established by the State Department. There are also some inconsistencies in theamendmentswiththelawandtheExecutiveOrderNo.Iof2023thatestablishestheState Department for MSMEs Development that may hamper implementation of the Bill

• 30.The State Department submitted additional amendments to the Micro and Small Enterprises Act, Cap. 499C stating that the proposals take into account stakeholder engagement undertaken during the review of the Act and developments in the structure of Government arising from Executive Order No. I of 2025 which established the State Department for Micro, Small and Medium Enterprises Development.

CommitteeObservation/Recommendation

The Committee noted that the State Department is undertaking a comprehensive review of the Act. The Committee recommended that the Bill be deleted in its entirety.

4.2 The National Treasury (TNT)

Financial Sector Affairs informed the Committee that the National Treasury supports the amendments proposed in the Bill andproposed the followingfurther amendments to theAct:

Section2 of theAct

31. Amend definition of "micro, small and medium enterprises" to provide that where there is conflict between turnover, number of employees and assets, the turnover will prevail in the classification of MSMEs. This will ensure proper classification of MSMEs for impact evaluation of Government led initiatives towards supporting MsMEs' growth and development. 32. Amend the section to provide for the definition of "medium enterprises" because the enterprises for creating more employment opportunities. Medium enterprises have unique needs, higher capacityforscaling andgreaterpotential forformalisation. 3. 33.Amend theturnover thresholdsofMSMEssothatthe annualturnoverisasfollows:Kshs.5million for micro enterprises; Kshs. 25 million for small enterprises; and Kshs. 250 million for medium enterprises. The proposed new thresholds reflect the average market turnover for such enterprises and factors in the changes in inflation since 2012. 34. Amend the section to provide that, "the Cabinet Secretary responsible for matters relating to the Micro and Small Enterprises Act, Cap. 499C with section 6 and 24 (4) of the Public Finance ManagementAct,2012.

CommitteeObservation/Recommendation

The Committee noted the submissions of the National Treasury proposing further amendments to the Act, including amendments to the definition of micro, small and medium enterprises, the introduction of a definition for medium enterprises, revised turnover thresholds, and alignment with the Public Finance Management Act, 2012. The Committee however noted that the proposals touch on substantive matters of policy and may appropriately be considered in the context of a comprehensive review oftheAct.

4.3 The Kenya National Innovation Agency (KeNlA)

Legal Officer informed the meeting that KeNlA was in support of the amendments proposed in the Bill andproposed insertion of the following newparagraphs inthe Act:

35. Amend the Act by inserting a paragraph providing for innovation support, incubation, commercialisationandcompetition. 36. Amend the Act by inserting a paragraph providing that innovation challenges/hackathons should be complianttoKeNlAstandards. 37. Amend the Act by inserting a paragraph providing that advisories on incubation support should adhere to KeNlA advice on incorporation of IP and commercialisation. 38. Amend the Act by inserting a paragraph providing for sharing of innovation related incubation and commercialisationdatabetweenMSEAandKeNlA.

Committee Observation/Recommendation

The Committee noted the submissions of KeNlA proposing amendments relating to intellectual property, and data sharing between MSEA and KeNIA.

4.4 The Micro and Small Enterprises Authority (MSEA)

39. In a meeting with the Committee held on Thursday, 26th February 2026, Ms. Mary Chege, Deputy Director for Legal Services informed the Committee that the State Department for MSMEs Development was undertaking a comprehensive review of the Act and therefore requested the Committee to give them more time to finalise. She averred that some proposals in the Bill had alreadybeencaptured in theStateDepartment'sproposals.

Committee Observation/Recommendation

The Committee noted the submission of MSEA indicating that the State Department for MsMEs Development is undertaking a comprehensive review of the Act. The Committee recommended that the Bill be deleted in its entirety.

4.5 Hon. Moses Cheruiyot Rotich

In a meeting with the Committee held on Thursday, 26th February, 2026, Hon. Moses Rotich, Member of the County Assembly of Kericho proposed the following amendments to the Act:

40. Amend the Act by including student entrepreneurs in the mandate of the Micro and Small Enterprises Authority. 41. Amend the Act by providing for the integration of the Higher Education Loans Board (HELB) loan 42. Amend the Act to provide for the offering of training in product development, branding and

CommitteeObservation/Recommendation

The Committee considered the three proposals against the subject matter of the Bill and observed that the Bill's purpose is specific and narrow.None of the three proposals advanced in the memorandum are connected to the subject matter of the Bill. To unreasonably, contrary to Standing Order I33(5) of the National Assembly Standing Orders.

4.6TheAfricanWomenStudiesCentre

In a letter dated 23rd October 2025, Dr.Agnes Meroka-Mutua, Senior Lecturer,Department of Private LawandAssistantCoordinatorPolicyAdvocacyWomen'sEconomicEmpowermentHubatthe University of Nairobiproposed the following amendments to the Act:

Section31

43. Amend paragraph 31 (fa) to read as follows,"Advocate, coordinate, harmonise, implement and promote national brandinginitiativesandpoliciestopromotetheconsumptionoflocalenterprises'products,including useofaffirmative action andpromotionofwomen-ledenterpriseswithinKenyanmarkets".Thefunctions 44. Amend paragraph 31 (fb) to read as follows, "The Authority shall, in collaboration with the Kenya Innovation Agency,the Information and Communication Authority,Standards andProduct Development Institutions and other relevant institutions, establish and implement programmes to support micro and small enterprises in: (a) Technology upgrading; (b) Quality and design improvement; (c) Standards and product development; and Innovation and commercialisation of products and services. In exercising subsection (l), the Authority shall:(a) Ensure that such programmes are gender-responsive and inclusive of women-led enterprises;(b)Facilitate equitableaccess to innovationhubs,digital infrastructureandtechnical advisory servicesforwomen entrepreneurs;(c)Providetargetedoutreach,trainingandcapacity-buildingtailoredto theuniqueneeds ofwomen-ledmicro andsmall enterprises;and(d)Monitorandreportannuallyon the participation, outcomes and impact of such programmes on women-led enterprises". To mandate the Authority to design and implement innovation support programmes that are inclusive of women-led enterprises. 45. Amend paragraph 3l (fc) to read as follows, "Collaborate with relevant agencies to promote the consumption of goods and services produced by local micro and small enterprises including women-led from marketing and promotion initiatives. 4. whichfocusesondeliveringadvisoryservicestolocal enterprises. 47. Amend paragraph 31 (fe) to read as follows, "Collaborate with other agencies to provide support andadvisoryservicestolocalfarmenterprisesincludingwomen-ledenterprises andconsumerson

the quality produce and products". To ensure that the provision explicitly recognises the participation of women entrepreneurs who face structural barriers in accessing advisory and support services.

Section74

48. Amend paragraph 74 (ba) to read as follows,"Prescribing mechanisms for the development, marketing andbrandingof products by local enterprises and micro and small enterprisesincluding:(i) the formulation ofstrategiestoenhancethevisibility,competitiveness,andmarketaccessofproductsdevelopedbymicro andsmall enterprises;(i) theestablishment ofprogrammes and incentives to supportproduct design, packaging,certificationandbrandinginlocal andinternational markets;(ii)thedevelopmentofinclusive and gender-responsiveframeworksthatpromotetheparticipationofwomen-ledenterprisesinproduct development, marketing and branding initiatives;(iv) the facilitation of access by women-led enterprises to digital platforms, innovation hubs and promotional infrastructure;and (v) the provision of targeted training, mentorship andfinancial linkages to strengthen the capacity ofwomen-led micro andsmallenterprises in value addition and brand development'. To ensure that women-led enterprises benefit from targeted support inproduct development,marketing andbranding. 49. Amend paragraph 74 (bb) to read as follows,""Prescribing the affirmative action to promote the local and procurement initiatives effectively target women-led enterprises, youth and PWDs.

CommitteeObservation/Recommendation

The Committee noted the detailed proposals of the African Women Studies Centre foramendmentstosections3land74oftheAct,aimedatmainstreaminggenderresponsiveprovisionsandensuring theexplicitinclusionofwomen-ledenterprisesin the Authority's mandate, innovation support programmes, marketing and branding initiatives, and advisory services. The Committee observed that section 3l(e) of the Principal Act already provides for the promotion of the mainstreaming of youth, gender and persons with disabilities in all MsEA activities and programmes. Section 3l(e) introducedbythisBill.

5.OCOMMITTEEOBSERVATIONS

Having considered the Bill, the Committee made the following observations on the Micro and Small

• The Bill's Long Title states its purpose as amending the Micro and Small Enterprises Act, No. 55 of 2012 to enhance the functions of the MSE Authority. However, the Objects and Reasons do not disclose a policy foundation; no policy paper, Cabinet approval, or sector study is cited to justify the specific amendments proposed. The amendments proposed in the Bill can be addressed at policy level. The Bill has not been preceded by the requisite policy process. A Bill of this nature ought to beanchoredonareviewedMSEPolicyorasectordiagnosticreportidentifyinglegislativegaps.

2. The Committee finds that each of the functions proposed under the Bill is either already provided forundertheMicro andSmall EnterprisesAct,No.55of2012,orfallswithin the existingoperational deficiency in the current functions of the Authority that necessitates legislative intervention. The proposed additions including covering branding, technology advisory, farm enterprise advisory, and market promotion do not expand the Authority's functional capacity in any substantive manner. They are,at best,a restatement of functions that the Authority already exercises or ought to exercise underits existingmandate.The Committee is therefore of theview that theBill, as drafted, addsnodiscerniblelegislativevaluetotheMsEAuthority'sstatutoryframework. 3. Section 3l(fd) proposes advisory services to local farm enterprises and consumers on quality of local farm enterprises on quality produce. The two provisions are substantively repetitive and neither is sufficiently distinct to justify separate clauses. 4. The Bill proposes a power to prescribe affirmative action to promote local consumption of MSE goods and services. WWhile the constitutional basis for affrmative action is sound, the provision does regulations would interactwiththePublicProcurementandAssetDisposal Act(PPADA),2015,

• 5.The Committee received and considered a memorandum from the University of Nairobi AWSC WEE-Hub, which raised substantive concerns about the gender-responsiveness of the Bill. While the Committee acknowledges the importance and legitimacy of the concerns raised it notes that several of the proposed textual revisions advanced in the memorandum go beyond the scope of an amendment to the MSE Act and are more appropriately addressed through subsidiary legislation, a dedicated gender policy framework, or the Women Enterprise Fund Act.

CHAPTERFIVE

CHAPTERSIX

6.0COMMITTEERECOMMENDATION

The Committee having reviewed the Micro and Small Enterprises (Amendment) Bill (National Assembly Bill No. 25 of 2025) recommends that the House DELETES THE BILL IN ITS ENTIRETY.

CHAPTERSEVEN

7.0SCHEDULEOFPROPOSEDAMENDMENTS

The Committee proposed the following amendments to be considered by the House in the Committee Stage:

Clause I

• THATtheBill beamendedbydeletingclauseI.

Clause 2

• 2

• THAT the Bill be amended by deleting clause 2. Clause 3

3. THATtheBillbeamendedbydeletingclause3.

M0l226

SIGNED....

..DATE..

HON.BERNARD MASAKASHINALI,CBS,MP CHAIRPERSON,

DEPARTMENTALCOMMITTEE ONTRADE,INDUSTRYANDCOOPERATIVES

REFERENCES

• 1.https://www.knbs.or.ke/wp-content/uploads/2024/05/Facts-Figures-2024.pdf

2. https://msme.go.ke/sites/default/files/2025-03/Draft%20MSME%20Policy%2025.pdf 3. https://msea.go.ke 4. https://www.centralbank.go.ke/uploads/banking\_sector\_reports/1809756600\_2024%20Survey% 20Report%20on%20MSME%20Access%20to%20Bank%20Credit.pdf 5. https://new.kenyalaw.org/akn/ke/act/2012

• 6.https://msme.go.ke/sites/default/files/2025-03/Draft%20MSME%20Policy%2025.pdf

THIRTEENTHPARLIAMENT-FIFTHSESSION-2026

DEPARTMENTALCOMMITTEEONTRADE,INDUSTRYANDCOOPERATIVES

ADOPTIONSCHEDULE

We, the undersigned Honorable Members of the Departmental Committee on Trade, Industry and Cooperatives today, Thursday, 26th March 2026 do hereby affix our signatures to this Report on the Micro and Small Enterprises (Amendment) Bill (National Assembly Bill No.25 of 2025) to affirm our approval and confirm its accuracy, validity and authenticity:

| S/NO. | NAME | SIGNATURE | |---------|--------------------------------------------------|-------------| | | Hon. Benard Masaka Shinali, CBS, MP Chairperson | | | 2. | Hon. Marianne Jebet Kitany, MP Vice- Chairperson | | | 3. | Hon.Adhe Wario Guyo,MP | | | 4. | Hon.Anthony Tom Oluoch,MP | | | 5. | Hon. (Dr.) Beatrice Kahai Adagala, MP | | | 6. | Hon. Joshua Mbithi Mutua Mwalyo, MP | | | 7. | Hon. Joyce Kamene, MP | | | 8. | Hon.Robert Githinji Gichimu,MP | | | 9. | Hon.(Dr.)WilberforceOjiamboOundo,MP | | | 10. | Hon. Adams Korir Kipsanai, MP | | | I1. | Hon. Alfred Kiprono Mutai, MP | | | 12. | Hon.Amos Maina Mwago, MP | | | 13. | Hon.JohnOkanoBwire,MP | | | 14. | Hon. Samuel Sakimba Parashina,MP | | | 15. | Hon.MichaelWainainaWambugu,MP | |