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Effects of Cyber Crime on Business in Kenya

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    Cybercrime is illegal access of information using a computer networks. Due to its transnational characteristic, cybercrime has effects on both domestic and international sectors. It is impossible for a country to handle cybercrime on its own. This is why it is crucial for us to work jointly and defend cybercrime on a global scale. The trend towards digitization is growing and as much as they need technology in order to ease processes and management, their systems need to be secured at any cost. Many essential aspects of life including water, electricity, traffic lights, elevators, air conditioners, machines in hospitals and many more rely on smooth running of ICT.Therefore there’s need of protecting information in every sector. This is because hackers are ready to manipulate any open opportunity to benefit themselves. Crime ware as a way of protection has lowered the chances of entry. However, cyber criminals are aware of the new ways and their effort is building up in order to succumb the chains tied around the safes of crime ware and they can now outsource much of their work to skilled craftsmen. “Enhancing cybersecurity and protecting critical information infrastructures are essential to each nation’s security and economic well-being “(Rev. Antalya, 2006). However, we should not only embrace technical measures but also legal action is necessary. The types of cybercrime that have a big economic impact on the businesses may include:

    Cyber terrorisms have been experienced in many countries all over the world. The reasons of the attacks being to bring down parts of a national or international information infrastructure for the purpose of humiliating governments and bringing tension among the citizens of the given country. The loss of confidential information of a business is a big outcry. National security when it involves military technology is at a high risk to attacks. Reason being they give little consideration to potential cyber vulnerabilities, lack of skilled staff and failure to keep up with new advances. Hostile groups such as terrorists take advantage of such opportunities and access important information from the military group. They then use the weaknesses and transform them to strengths for their own benefit. When they attack, it results to uncountable losses of losing both life and property. Buigut and Amendah (2015) show that:

    terrorism has indeed significantly affected tourist arrivals and earnings in Kenya. Their results show that a 1% increase in fatalities decreases the arrivals of tourists by about 0.132% which suggests an annual loss of about Ksh157.1 million in tourism revenues per unit increase in fatality for the country.

    Businesses are brought down with no future to stand like before. According to Daily Nation, (Trevor ,2013), “Investors lost millions of shillings in revenues and destroyed property following the terrorist attack at the Westgate shopping mall that had claimed more than 60 lives.” The effects of having intellectual property like business ideas, marketing campaigns or business expansion plans stolen or exposed has a negative impact especially on a competitive edge.

    Financial crime and online fraud is not an exception. Many parts of the world report that malware attacks mostly hit banks and other financial institutions. This is because banks are venturing into mobile banking with an aim of easing transactions. The more financial institutions are clogging activities online; the more hackers are inventing new ways of hijacking customer details. Details such as names, account numbers and personal identification number are enough to perform money transactions without the customer’s conscience. Local banks lose millions of shillings as many of them have insecure systems. A study shows:

    Directorate of Criminal Investigations (DCI)’s Economic Crimes Unit on January 30 issued warrants of arrest for 130 suspects who they suspected had engaged in banking fraud between June last year and January this year (2016).

    Online fraud is where an original is copied and pasted with an aim of avoiding paying the right cost or in other words tax and revenue evasion. A report done by University of Oregon (2017):

    It is estimated that 90% of the software, DVDs, and CDs sold in some countries are counterfeit, and that the total global trade in counterfeit goods is more than $600 billion a year. In the USA alone, IP theft costs businesses an estimated $250 billion annually, and 750,000 jobs.

    For instance, piracy in Kenya is a day to day activity. People copy and paste music and films and burn them on floppy diskettes that are later sold at low prices without benefiting the original owner and in general the country’s economy. Since pirated software products cannot take advantage of updates from manufacturers, they accelerate the spread of malware. According to business daily (2016), “Software firms in the country have lost a cumulative Sh12.8 billion from illegal and unlicensed software installations, highlighting the challenge that piracy poses to technology companies.”

    The cost of paying for recovering from cyber-attacks is so expensive. Cyber insurance generally is very expensive. This is because securing a business is tailored according to its needs and it requires a unique software. The premiums required by the insurance company are high because it is difficult to predict the extent of cybercrime that might occur on a company. Cyber liability insurance often covers preventative measures such as security software, as well as damage control procedures such as alerting members about the breach, legal fees and other risk management costs that arise (Laycock.R.2017). Furthermore, the known cybercrimes that ever occurred, costed a large amount. Lack of awareness, the perception that genuine software is expensive, weak laws and poor enforcement are some of the factors that have slowed down the war against illegal software. Therefore, common mwananchi will prefer buying copied movies from a kiosk or copying them on portable usb’s to avoid a large cost that could have otherwise be installed on an original copy.

    Reputation damage for the affected company and its brand is another big economy pull down. For instance, customers will find it hard to trust a company whose information is leaked. Convincing them through advertising, sales promotion and other forms will cost the company a lot. If the company involved international sales, then the country loses foreign exchange that would have otherwise added to the country’s revenue. To the investors, they will find it hard to believe or trust their resources on a company whose image is ruined. Perhaps not so shocking, is that most customers would be willing to completely break ties with a breached organization. According to Clickatell (2016), nearly two-thirds of people surveyed indicated that they would end their relationship with an organization after their personal information had been exposed, never to return, and certainly never recommend the company. At its core, a data breach results in the erosion of customer trust.

    In conclusion, cybercrimes don’t happen behind the computer as a lay man could construct it, but instead it’s executed by the computer. Hackers could perform malicious activities from any part of the world. We should be aware of the dangers of cybercrimes and the importance of cyber security instead of viewing it as a luxury. Through updating our systems and constantly changing the passwords, we are assured that our system is secured.

    The government should also install high legal measures on cybercrime because apparently it has a big impact than physical crime. This act will have a big change on Kenya’s information technology environment. In some cases, this is a good thing: cybercrime must be taken seriously and criminals brought to


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    8. University of Oregon. (2017). Publication Manual of the Extent of Cyber Crime in USA [PDF file]. Oregon, Aurthur, P. Retrieved from

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