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

1. A Sure Commitment to Small and MediumA Sure Commitment to Small and Medium
Enterprise Capacity Development: Are wordsEnterprise Capacity Development: Are words
matched by actions?matched by actions?
Presentation at the Africa SME ForumPresentation at the Africa SME Forum
At Capital HotelAt Capital Hotel
2525thth
April 2013April 2013
John MatayaJohn Mataya

2. Importance of SMEs
Generic:
• Make 60-90 % of all enterprises
• Provide over 60% of all private sector jobs
• More innovative
• Contribute to Export and foreign
exchange earnings
• Reach out to rural areas with services
• Alleviate poverty
Therefore known as:
• Engines of Growth
• Backbone of national economies
• Innovators
• Contributors to national development
Malawi
• 758 business owners
• 987 SMEs
• 1050320 people employed
• Generated about Mk326 billion (2011)
• 46% of owners are women
• Majority of owners have little education
Source: FinScope (2012)
Gemini (2000)

3. Commitment Statements and Deed
by Government
Words
• GoM first recognized the importance of
SMEs around and committed to their
development 1989 (READ 1989)
• “Recognizing the pivotal role they play in the
development of the country, GoM has given
high priority to the development of SMEs”
(Directory of MSME)
• GoM has created several institutions to
provide support services to SMEs
(GoM/UNDP 1992)
• The Policy aims to create modern and
effective framework to guide the
development of profitable, competitive and
sustainable MSMEs in Malawi
(Draft MSMEs Policy 2012)
Many Political statements abound in news
papers
Deeds
• Department responsible for SME
within a large Directorate
• Business Support Institutions Created
DEMAT, SEDOM, MEDI, MIRTDC,
MRFC, Technical Schools-
• Programmes: 5th
Country Programme,
PSDP, BESTAP
Lets assess the status and performance
of both these institutions and
programme for us to appreciate the
importance of capacity

4. International Trade Center (ITC 2004) asserts that commitment is an important step in designing programmes aimed at assisting
SMEs. Norain (2012) argues that SMES would need to be provided with suitable capacity building if they are to realize their full
potential. This argument goes beyond word to action hence the title of this short paper.

5. FINDINGS COMMITMENT
Capacity building needs indicators
• 80% respondents say it is important for GoM to
promote 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 SME
development
• 60% say key stakeholders are not consulted on
policy issues
Reasons given are all related to absence of capacity
Capacity building framework

6. Conclusions and Recommendations
Conclusions
• Generally GoM does not have capacity for
promoting SMEs
• Specific capacity is lacking in these areas:
- Leadership..providing vision and direction
• Providing services and advise through business
development institutions
• Providing training and business advisory services
to individual SMEs
Recommendations
• Capacity building should start an the macro level
with policies, support institutions, leadership
• At the person level
• Person level; training providing skills:
management, technical and financial among
others.

7. Conclusions and Recommendations
Conclusions
• Generally GoM does not have capacity for
promoting SMEs
• Specific capacity is lacking in these areas:
- Leadership..providing vision and direction
• Providing services and advise through business
development institutions
• Providing training and business advisory services
to individual SMEs
Recommendations
• Capacity building should start an the macro level
with policies, support institutions, leadership
• At the person level
• Person level; training providing skills:
management, technical and financial among
others.