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John Mataya - Malawi SMEs Development Conference Presentation

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A Sure Commitment to Small and Medium Enterprise Capacity Development: Are words matched by actions?

A Sure Commitment to Small and Medium Enterprise Capacity Development: Are words matched by actions?

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  • 1. A Sure Commitment to Small and MediumA Sure Commitment to Small and MediumEnterprise Capacity Development: Are wordsEnterprise Capacity Development: Are wordsmatched by actions?matched by actions?Presentation at the Africa SME ForumPresentation at the Africa SME ForumAt Capital HotelAt Capital Hotel2525ththApril 2013April 2013John MatayaJohn Mataya
  • 2. Importance of SMEsGeneric:• Make 60-90 % of all enterprises• Provide over 60% of all private sector jobs• More innovative• Contribute to Export and foreignexchange earnings• Reach out to rural areas with services• Alleviate povertyTherefore known as:• Engines of Growth• Backbone of national economies• Innovators• Contributors to national developmentMalawi• 758 business owners• 987 SMEs• 1050320 people employed• Generated about Mk326 billion (2011)• 46% of owners are women• Majority of owners have little educationSource: FinScope (2012)Gemini (2000)
  • 3. Commitment Statements and Deedby GovernmentWords• GoM first recognized the importance ofSMEs around and committed to theirdevelopment 1989 (READ 1989)• “Recognizing the pivotal role they play in thedevelopment of the country, GoM has givenhigh priority to the development of SMEs”(Directory of MSME)• GoM has created several institutions toprovide support services to SMEs(GoM/UNDP 1992)• The Policy aims to create modern andeffective framework to guide thedevelopment of profitable, competitive andsustainable MSMEs in Malawi(Draft MSMEs Policy 2012)Many Political statements abound in newspapersDeeds• Department responsible for SMEwithin a large Directorate• Business Support Institutions CreatedDEMAT, SEDOM, MEDI, MIRTDC,MRFC, Technical Schools-• Programmes: 5thCountry Programme,PSDP, BESTAPLets assess the status and performanceof both these institutions andprogramme for us to appreciate theimportance of capacity
  • 4. International Trade Center (ITC 2004) asserts that commitment is an important step in designing programmes aimed at assistingSMEs. Norain (2012) argues that SMES would need to be provided with suitable capacity building if they are to realize their fullpotential. This argument goes beyond word to action hence the title of this short paper.
  • 5. FINDINGS COMMITMENTCapacity building needs indicators• 80% respondents say it is important for GoM topromote SMEs• 60% think that GoM is not providing support• 60% GoM not providing information• 50% say institutional framework not effective• 70% say there is no leadership for SMEdevelopment• 60% say key stakeholders are not consulted onpolicy issuesReasons given are all related to absence of capacityCapacity building framework
  • 6. Conclusions and RecommendationsConclusions• Generally GoM does not have capacity forpromoting SMEs• Specific capacity is lacking in these areas:- Leadership..providing vision and direction• Providing services and advise through businessdevelopment institutions• Providing training and business advisory servicesto individual SMEsRecommendations• Capacity building should start an the macro levelwith policies, support institutions, leadership• At the person level• Person level; training providing skills:management, technical and financial amongothers.
  • 7. Conclusions and RecommendationsConclusions• Generally GoM does not have capacity forpromoting SMEs• Specific capacity is lacking in these areas:- Leadership..providing vision and direction• Providing services and advise through businessdevelopment institutions• Providing training and business advisory servicesto individual SMEsRecommendations• Capacity building should start an the macro levelwith policies, support institutions, leadership• At the person level• Person level; training providing skills:management, technical and financial amongothers.