Informal Sector: Carpentry & Wood Works

Image result for Informal sector wood works

(Source: http://www.financialgazette.co.zw/power-deficit-chokes-informal-sector/)

Wood artisans have been a part of informal business for a long time. Their work forms a central component in a majority of households. These range from dining tables and chairs, sofa sets, beds, cupboards, cooking spoons, picture frames and even wood carvings that we use to give that aesthetic touch to our homes. In their quest to remain competitive and relevant, they have had to overcome a myriad of hurdles.

The first challenge is that they face stiff competition from imported products which are often perceived to be of higher quality often due to the latter’s quality of finishing. Although some local artisans use modern tools when making furniture, a majority of them are yet to adopt newer technologies. Sticking to the old models of operation that makes them have a low production capacity means that they not to be able to access clients who require mass production. This is only possible for those who are in associations and thus sub divide such orders and contracts so as to meet the demand. The problem with this is that the goods that they end up producing are not usually of the same standard.

During my visits to various small scale businesses around the country, the wood artisans I interviewed made me understand that they have had to face the reality that when they make high quality products, such as beds and wall units, these often go for long periods of time without being purchased. In this sense, such products tend to tie down capital. The option that has worked for them has been to produce cheaper products which have a higher turnover. This has been the case in peri urban parts of Nairobi and towns such as Nanyuki, Kisumu and Mombasa. Part of the problem is the level of income of the clients they serve is usually low.

Also, most small businesses face numerous challenges when trying to access support from financial institutions. Wood artisans are not an exception. Due to the size and scope of their operations, majority of those that I have interacted with see no need of book keeping for example for they believe that their mental memory is sufficient to record all their dealings and transactions. This fallacy becomes an issue when they approach financial institutions for loans. The latter requires them to produce financial historical records of their business dealings for a risk analysis that can enable them to gauge their credit worthiness. This is the point where most micro and small businesses are disqualified from the loan application process.

It is with these dynamics in mind that Bosch have partnered with Equity Bank to avail the Bosch Power Box (BPB) to Jua Kali artisans. The BPB enables artisans to hire the tools on a day to day basis and eventually purchase them through a micro financing deal that the two institutions have agreed upon. This will go a long way in enabling artisans to improve the quality of their products as well as scale up the efficiency of their operations. The artisans are given technical training on how to handle and use modern equipment and put on a plan where they can comfortably pay for the tools. This is an endeavor that needs to be replicated as it ensures that micro and small businesses in the sector up-skill and upscale their operations.

 

litualex@gmail.com

 

Informal Economy Analyst 

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4 thoughts on “Informal Sector: Carpentry & Wood Works

  1. Frank February 6, 2017 / 6:05 pm

    I could nnot resiszt commenting. Very well written!

    • Litu February 16, 2017 / 8:53 am

      Thank you

  2. bath and body works codes February 13, 2017 / 4:54 pm

    Hmm is anyone else experiencing problems with the pictures on this blog loading? I’m trying to find out if its a problem on my end or if it’s the blog. Any suggestions would be greatly appreciated.

    • Litu February 16, 2017 / 8:52 am

      Apologies. The problem seems to be on your end

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