Chamber for Small and Medium Enterprises Association executive secretary James Chiutsi says rising prices are frustrating and stiffing the growth of small businesses.
In an interview on Tuesday, he has said already burdened by foreign exchange scarcity which has given boon to black market operators, small businesses are faced with rising operation costs due to the recent electricity tariff hike.
Said Chiutsi: “Now, electricity tariffs have just gone up and the expectation is that water tariffs will follow suit.
“This is happening when the cost of production has remained elevated.”
He said worsening the situation is lack of finance to boost their businesses means businesses cannot grow.
Said Chiutsi: “SMEs require readily available sources of finance that are cheap, reliable and that are developmental.
“It is difficult for anyone to get funding today because you get a loan and in 30 days you are supposed to pay back the loan, so we need developmental loans that allow someone to pay back the loans after a year.”
Speaking separately, Blantyre-based entrepreneur Evelyn Mtawali said rising prices means reduced capital.
“When we order at a high price, customers want to buy the goods at old prices because everyone is facing financial problems. In the end, we are not making profits because even where we are ordering, sometimes the prices are excessive,” she said.
A FinScope Survey of 2022 indicated that only 10 percent of medium enterprises, five percent of small enterprises and three percent of microenterprises have access to credit from commercial banks.
The Malawi Financial Inclusion Strategy (2024-2028) seeks to reduce financial exclusion from 12 percent to five percent to achieve sustainable and inclusive growth and support job creation.
The strategy intends to include all players in the country’s economy with financial inclusion as an essential instrument for increasing agriculture and small enterprises production and eventually increasing household income, reducing poverty, increasing resilience and accelerating economic growth.
