The number of new business entities registered in Kenya during the first quarter of this year rose 4.6 per cent to 38,446, up from 36,775 a corresponding period last year, amid optimism of better fortunes for some entrepreneurs.
Data from the Business Registration Service (BRS) shows the number of new firms registered between January and March 2025 is the highest in a single quarter since the 39,044 that were registered during the three months to September 2023.
The bureau attributed the growth in new company registrations to higher optimism among prospective business owners at the beginning of the year, coupled with a more streamlined registration process that eased the hassle for applicants.
“We take note that the Purchasing Manager Index (PMI) during the quarter remained above 50 indicating an improvement in the business operating environment.”
Kenyan firms have since last October been reporting gradual rise in sales, marking a recovery from previous months when demand was hit by depressed circulation of money in a softening economy due to the prohibitive cost of borrowing and piling pending bills.
Households and businesses had also delayed spending decisions for non-essential goods and services due to economic uncertainty that followed the deadly anti-State protests between June and July last year.
The current numbers reverse a trend witnessed during the full year to last December where newly-registered entities dropped 7.6 per cent to 130,527 from 141,193 the previous year.
BRS data indicates that the year-on-year growth was mainly driven by a 16.8 per cent expansion in registration of private companies, which increased to 18,064 up from 15,464 in the first quarter of last year.
The registration of business names recorded a slight contraction after dipping 5.1 per cent to 19,869 down from 20,926 in a similar period a year earlier.
Private companies are defined as organisations whose members’ liability is limited by shares while registration of business names largely represents sole proprietorship ventures owned and operated by one person.
“A company is limited by shares if the liability of its members is by the memorandum to the amount if any, unpaid on the shares respectively held by them. A private company is also a company that is restricted from inviting the public to subscribe to its shares,” the BRS states.
Other business entities included in the BRS registrations catalogue include public companies, foreign companies, companies limited by guarantee, limited liability partnerships as well as limited partnerships.
The number of entities struck off the registry during the quarter under review grew 37.2 percent to 561 from 409 in a similar period last year.
A total of 24 companies showed distress signs during the period up from 19 in a corresponding period last year, with four opting for voluntary liquidation and a similar number applying for bankruptcy with the Registrar of Companies.
