The newly enacted small and medium enterprises (SMEs) Bill of 2024 is poised to revolutionise the country’s business landscape by boosting technology transfer and enhancing competitiveness, stakeholders have said.
The SMEs law also establishes the Small and Medium Enterprises Development Corporation (Smedc) to replace Small and Medium Enterprises Development Institute (Smedi) and provide regulatory oversight and support for small businesses.
Under the law enacted on Thursday in Parliament, Smedc will also be empowered to provide incentives to encourage growth and development of small businesses, including but not limited to tax breaks, access to finance and better access to development programmes.
Reads the law in part: “Smedc will facilitate access to funds and resources for the development of appropriate technology in research institutions and enterprises that develop technology for the micro, small and medium enterprises sector.
“It will also foster innovation and transfer of technology with a view to increasing competitiveness of micro, small and medium enterprises’ goods and services.”
The enactment of the law follows a World Bank report titled ‘Digital opportunities in African businesses’, which showed that lack of digitalisation in low-income countries such as Malawi and other sub-Saharan countries limits their capacity to compete with their middle-income peers in regional and international markets.
Speaking in an interview on Friday, Minister of Trade and Industry Sosten Gwengwe said the law is designed to enhance small businesses’ competitiveness on the local scene and potentially set them up for success in regional and international markets.
He said: “We want to use the new law to create a level playing field for SMEs to compete with big corporations whether it is doing business with the government.
“But they have to formalise their businesses to access these opportunities and this law makes it easier for them to be known.”
Gwengwe also allayed concerns that the law will force businesses to register.
“The ministry was asking MSMEs to bring registration documents and proof of residence even before the law was passed. It is part of our normal due diligence.”
In an interview, Scotland-based Malawian economist Velli Nyirongo said the law’s focus on promoting industrial parks and technology transfer will create opportunities for MSMEs to access affordable business infrastructure and modern technology, which will enhance their bankability and ability to secure financing.
He, however, urged the Ministry of Trade and Industry and stakeholders to structure the training programmes under Smedc to prioritise practical skills development, such as business management, financial planning and marketing
“Incorporating mentorship and peer-learning models could prove invaluable, allowing MSME owners to learn from others who have successfully navigated similar challenges,” said Gwengwe.
Chamber for Small and Medium Businesses Association executive secretary James Chiutsi welcomed the law, saying they were consulted when it was being developed.
“The law represents a significant step forward in supporting the growth and development of small businesses,” he said.
Among others, the law will facilitate technology transfer, improve access to financing and creating a more conducive business environment and it is expected to drive innovation and enhance the competitiveness of local businesses both domestically and internationally.
