Eugene Nizeyimana - Improving the Competitive Strength of SMEs in Malawi
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Eugene Nizeyimana - Improving the Competitive Strength of SMEs in Malawi

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MALAWI SME Development Conference: Improving the Competitive Strength of SMEs in Malawi through Business Development Services

MALAWI SME Development Conference: Improving the Competitive Strength of SMEs in Malawi through Business Development Services

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  • 1. ________________________________________________________________________________________________________________________ Malawi SME Development Conference, 20 April 2013 Eugene Nizeyimana Chief Operating Officer, SSCG @2013 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com Improving the Competitive Strength of Small Businesses in Malawi
  • 2. SSCG Outlook – What we do? Khartoum Cairo Tripoli Algiers Tunis Rabat Nouakchott Bamako Dakar Bissau Niamey N´Djamena Freetown Monrovia Yamoussoukro Ouagadougou Abuja Accra Porto–Novo Malabo Sáo Tomé Douala Bangui Libreville Brazzaville Kinshasa Luanda Windhoek Lusaka Harare Gaborone Pretoria Maseru Maputo Maroni Mogadishu Nairobi Addis Abeba Kampala Kigali Bujumbura Antananarivo Lilongwe Djibouti Asmara Dodoma Juba Mission:  Facilitate private sector development, investment and trade in Africa.  Promote human capacity development: skills empowerment, knowledge transfer, innovation and entrepreneurship.  Strengthen the base for growth: Improving investment climate, business infrastructure and regional integration.  Foster economic growth: SMEs, industrial competitiveness, value chains development and job creation. @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________
  • 3. YOUR LOGO Inspiring Entrepreneurship and Innovation: Fostering SMEs Development and economic growth in Africa. @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com
  • 4. ________________________________________________________________________________________________________________________ @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com  A capacity building initiatives to improve business performance, efficiency , competitiveness and drive economic development.  A platform to act as a catalyst for action and to help accelerate the achievement of small businesses.  Increase the scale and pace for implementation of entrepreneurship and innovation solutions through dialogue.  Identify new innovative mechanisms and solutions to support SMEs growth in Africa About SSCG Africa SME Growth Forum ________________________________________________________________________________________________________________________
  • 5. How can We Improve the Competitive Strength of Small and Medium sized Enterprises (SMEs) in Malawi? @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com
  • 6.  “ The Missing Middle”  Engines of Sustainable Economic Growth  Classification: Based on the number of employees or on monetary measure (capitalisation, investment turnover and sales) or a combination of two or more Measure Employees Total Assets Micro Enterprises 10 < less $100 K < Less Small Enterprises 10 – 50 $100 -3 M Medium Enterprise 50 – 300 $3 – 15 M World Bank 2012 @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com SME Classification ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________
  • 7. The Role of SMEs in the Economy  Account for the bulk of the enterprise population in a country, irrespective of their levels of economic development.  Create employment opportunities.  Contribute to social development and people livelihoods.  Are prime mover of industrial development in many developed economies.  SMEs play pivotal role in building a solid industrial base.  The nursery of entrepreneurs. @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________
  • 8. Case Studies: SMEs Contribution in a Global Perspective The entire industrial base in many of developing countries is virtually composed of SMEs. They, along with micro enterprises, are high potential sector for employment generation and provision of livelihood to millions of people in African countries like Swaziland, Malawi, Kenya , Nigeria and Ethiopia, in South East Asian nations like Bangladesh, India, Sri Lanka and in Latin American countries. In Japan - 98% of seven million units are SMEs. They account for about 80% of total employment of around 55 million persons. Around 52% of the Japanese total exports emerge from this sector. SMEs are a most dominant form of business organisation in the U.S. They constitute around 98% of all businesses, employ over half of the US workforce and generate 54% of the sales revenues. Around 94% of total Italian firms are reportedly SMEs and they contribute about 40% of total GDP and 43 per cent of total employment. Similarly, they constitute over 95% of the units and more than half of the total employment in economies like Australia, Canada, Germany, United Kingdom, France, etc. @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com ________________________________________________________________________________________________________________________
  • 9. SMEs Contribution to Economic and Social Objectives Social Economic @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________
  • 10. Challenges Before SMEs Challenges Limitations Operation, management and entrepreneurial • Lack of new technologies and E-commerce • Size limitations • Lack of labour skills - Inability to hire qualified and talented people • Raw material constraints • Infrastructure limitations • Financial limitation • Lack of knowledge and inability to acquire new management skills Competition and exposure to global market • Little exposure to international market • Lack of market information and commercial intelligence • Inability to forge linkages to meet large demands • Uncompetitive product – price, standards and quality • Inability to create brand loyalty • Inadequate institutional support @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________
  • 11. Opportunities for SMEs to Exploit • The foregoing, however, does not mean that SMEs sector has no future. • The challenges noted above, in fact, are also the opportunities for SMEs to exploit. • The new economic order has opened up several opportunities for a discerning SMEs to expand their businesses beyond the national borders. • SMEs today have an opportunity to modernise their entire business operations with easy access to all needed inputs, including modern technologies. Exploiting global export market Enhanced scope for partnership and alliances Easier communication with customers and suppliers Scope of becoming local suppliers to industrial giants Develop competitive management skills Implement international standards Access market information Access to technology and innovative manufacturing systems Scope to attract investment (FDIs & Diaspora) and capital. @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com ________________________________________________________________________________________________________________________
  • 12. SMEs Adaptability in Challenging Environment Swiftly adapt to changes Require relatively less operation capital Innovative Able to take quick decisions Capable of developing niche markets Most important are nursery of entrepreneurs @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com SMEs Adaptability in Challenging Environment ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________
  • 13. Promoting SMEs Development Consciously  Looking at challenges faced by Malawi such as: inflation, unemployment and slowdown in investments: Stakeholders need to re-look at SMEs as answer to these problems in view of their adaptability.  Technological developments, resulting in several large corporations vacating areas of manufacturing and concentrating more on marketing, technology development and diffusion, have favoured SMEs.  Recognising the positive contribution that SMEs could make to the overall economic growth. Need to deliberately promote, nurture and develop the sector. @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________
  • 14. New Dimension of Business Development in Malawi  To exploit these opportunities and become an integral part of the fast emerging global production system, SMEs need to be competitive in a broader sense, capable of competing with foreign companies both in the domestic and international markets.  SME can only be termed as ‘competitive’ if they are able to service the required demand on time in desired quality, price and place.  Instituting SME-friendly policies and programme, with a very effective delivery mechanism can go long way in strengthening SMEs. Since the government is beset with several other responsibilities, and also have their own limitations, the private sector and other stakeholders need to be roped in to provide required support to SMEs. @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________
  • 15. Solutions: Developing SMEs Competitive Edge Some of the new forms of BDS that could help in improving the competitive strength of SMEs in Malawi are : Skill Development Capacity building in specific areas Technical skill development in identified industries Enterprise Digitization and Innovation: Technical Assistance Helping introducing cost and energy-effective technologies Open innovation Providing common facility centres which will act as knowledge exchange hubs. Market Development: Help forging SME linkages. Help identifying niche markets. Help to develop competitive brand / consortium approach. Hosting conferences or trade-fairs to establish contacts, supply databases and other market insights. @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com ________________________________________________________________________________________________________________________
  • 16. Solutions: Developing SMEs Competitive Edge – Cont. Access to Information: Trade barriers, trends, competitors and trading standards. Government policies and programmes; training opportunities and facilities; trade fairs and exhibitions. Providing information about new product development or the need for change according to environmental influences. Environmental issues and quality management. Advisory & Consultancy: Specialised services to address the specific issues. Help develop effective strategies for growth Financial management support. Access to finance & Capital : Combining many of these non-financial services with provision of finances would be beneficial to both SMEs and financial institutions. @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com ________________________________________________________________________________________________________________________
  • 17. ________________________________________________________________________________________________________________________ @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com Stimulate entrepreneurship and innovation. Empowerment - Improve SMEs management skills. Support SMEs access to global market & information. Increase industrial productivity and competitiveness. Empower SMEs to create employment opportunities. Drive value - Promote economic growth. Enterprise Digitization - Access to technologies and crowdsourcing . Key Objectives in Malawi: How we can stimulate SME growth? ________________________________________________________________________________________________________________________
  • 18. ________________________________________________________________________________________________________________________ @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com Projects • Enterprise Training & Advisory • Enterprise & Start-up Week • Lilongwe and Blantyre Business Hubs • Malawi Business Award 2013 & Malawi SMEs Forum • Malawi Enterprise Challenge Competition • Enterprise Capital Fund Growth Targets • Increase employment by 5%. • Increase start-ups rate by 10%. • Increase revenue by 1%. • Improve productivity by 10%. • Increased entrepreneurship and innovation activities by 10%. • Increased international trade by 10%. • Increased industry output diversification Summary: SSCG Objectives 2015 ________________________________________________________________________________________________________________________
  • 19. ________________________________________________________________________________________________________________________ These challenges will not be met overnight. We must all continue to work together to engage the economy’s most powerful forces, entrepreneurs, the private and public sectors, to build the foundations of a new era of economic growth. We hope SSCG initiatives will help set the stage for contributions to SMEs and entrepreneurship development in Malawi. @2014 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com Looking Ahead ________________________________________________________________________________________________________________________
  • 20. ________________________________________________________________________________________________________________________ Thank You For further information or to discuss your organisation tailored needs, contact our advisory team at: E: Info@s-scg.com W: www.s-scg.com @2013 SSCG Copyright The information contained herein is of a general nature and subject to change. Applicability of the information to specific situations should be determined through consultation with our advisers. For more information visit www.s-scg.com or contact us at info@s-scg.com Stay Connected @SSCGCorporation @SSCGSMEForum Facebook/sscg Linkedin/sscg Questions & Further Enquiry ________________________________________________________________________________________________________________________