Small businesses say 2017 year of mixed fortunes
Two small and medium enterprises (SMEs) groups have described 2017 as a year of mixed fortunes for small businesses.
Small and Medium Enterprise Development Institute (Smedi) and Small and Medium Enterprises Association (Smea) officials say despite the reduction in interest rates, SMEs are still finding it tough to access finance due to stringent conditions on collateral.
They add that commercial banks’ consider SMEs as risky borrowers.
In a written response to a questionnaire on Wednesday, Smea president James Chiutsi said what SMEs gained in the just-ended year, namely reduced interest rates, passing of the Procurement and Asset Disposal Act, outreach by the Malawi Bureau of Standards (MBS) and some export initiatives by the Malawi Investment and Trade Centre (Mitc) were easily wiped out by erratic supply of electricity which hampered production.
“In 2017 loans were still not easily accessible, skills are still running short and there was still little interaction between the larger economic players and SMEs, for example, there is still no deliberate effort to give shelf space to locally manufactured goods by chain stores,” he said.
Chiutsi said the biggest strategic issue in 2018 will be the launch of the SME Chamber in February which, will among other things, harness the power of working together.
Commenting on the same, Smedi acting chief executive officer Richard Zidana said 2017 offered hope on the policy and regulation of front and micro economic environment.
But he said all was not rosy in the year as SMEs failed to access markets due to lack of developed markets and lack of quality products that meets the demand of organised markets.
“We have seen some commitment from the government, laws and policies to do with collateral registry and warehousing receipts have been passed and will make it easier for SMEs to receive some form of finance.
“What is remaining now is for the SMEs to know what the passed bills entail and for the commercial banks to be aware so that SMEs can get loans easier,” he said.
On the prospects for this year, Zidana said they hope to build on the foundations that have been laid this year and that the micro economic environment continues to stabilise.
