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The threats of cyber-attacks and the prohibitive costs of necessary tools stand in the way of small businesses that seek to shift to the digital space.

This is according to the Digital Economy MSME Report released by the Centre for International Private Enterprise (CIPE) yesterday.

The survey notes that 27 percent of businesses said cyber security is their worry while 11 percent cited costs which include commission payments, transactions charges, delivery charges as well as internet expenditure.

Other impediments to digital transformation pointed out by SMEs include competition from peers, insufficient employee digital skills and lack of awareness on the benefits of using technology in business.

“Cybersecurity risk has been predominant during the post-Covid period due to the increased uptake of digital tools for payment and procurement of goods. The cost implication and awareness creation about cybersecurity make it difficult for MSMEs to fight against cyber threats,” reads the report in part.

Thirty-two percent of surveyed firms said they needed digital training as a necessary support for them to go online while 23 percent cited awareness campaigns. Other incentives that the businesses called for included free website domains, technical assistance and financing.

There are 7.41 million MSMEs in Kenya that collectively employ over 14.1 million people, according to the Kenya Bureau of Statistics (KNBS) data, which also indicate that the segment accounts for 90 percent of the total private sector enterprises and 93 percent of the country’s labour force.

The businesses in the sector contribute 24 percent of Kenya’s gross domestic product (GDP).

E-commerce, which refers to shifting business operations online, relies on enhanced interconnectivity of networks and the interoperability of new age platforms in all sectors of the economy to offer convergent services.

Digitisation of businesses has been credited with reduction of operational costs, improved productivity and expansion to new markets and customers.

The United Nations Conference on Trade and Development (UNCTAD) ranks Kenya 88th out of 152 countries in its e-commerce Index of 2020.

As part the of government’s efforts to support digital trade, the President William Ruto-led administration has announced plans to roll out up to 25,000 free internet hotspots in major trading centres countrywide.