Project tips SMEs on revenue generation
The Financial Inclusion and Entrepreneurship (Fines) project has moved in to train small and medium enterprises (SMEs) in sales and revenue generation to boost their revenue streams and contribute to the country’s economic growth.
The training focused on three core areas, namely sales management, financial management and business operations and has targeted SMEs who participated in the personal initiative training of the World Bank-supported project.
In an interview on Wednesday, Fines project manager Ralph Tseka said the training was built on the success of the personal initiative training, which has shifted the mindset of SMEs to recognise the value of knowledge.
Previously, most SMEs owners believed financial support was the only valuable form of business assistance.
But Tseka stressed that financial access remains a key component in the later stages of the Fines training developed by the IBF Consulting Group, Belgium-based international consulting group that focuses on development aid projects financed by international organisations.
“In the next five years, we aim to develop strong, resilient and business-oriented firms rather than rely on one-off interventions that have mostly focused on extending credit,” said Tseka.
Reacting to the training, Samuel Kachale, founder and manager of Kazinyama Restaurant, said the “structured” training helped them to refine successful sales strategies and address ineffective business practices.
He said: “The whole point of a business is to make sales and generate revenue. This training helped us better understand what we were already doing.
“The interactive sessions underscored the importance of sales and record-keeping.”
Chindikani Investments founder and general manager Martha Nyirenda, another participant in the training, said the record-keeping knowledge will help her to address critical business challenges, such as financing.
“Some of us [entrepreneurs] miss out on loans because we can’t convince banks that we generate enough revenue to expand and repay. Hopefully, that will improve going forward,” she said.
Improving the capacity to secure financing would ease a challenge reported by most SMEs during the previous training. Some participants expressed concern during the interactive sessions that they continue to face difficulties to access loans from commercial banks.
The Fines project is a five-year initiative led by the Government of Malawi and implemented by the Reserve Bank of Malawi with support from the World Bank.
The project seeks to increase access to financial services and enhance the entrepreneurial capacity of MSMEs in the country.
At least 44 677 SMEs have, so far, received financing support worth about $53.8 million (about K94 billion) of the $60 million (about K105 billion) through the Fines project.
Fines loans are offered at 11 percent per annum in commercial banks and four percent per month at microloan institutions.
In contrast, consumer loans are offered at around 35 percent per annum in commercial banks and five percent per annum at micro-loan institutions.
The recent Finscope SMEs Survey shows that about 1.6 million small business operate in Malawi, providing jobs to about 1.8 million people.