Establishing Small and Medium Enterprises chamber

Despite the sector being touted as the engine of the economy, Small and Medium Enterprises (SMEs) do not get the required support to be able to thrive. But while there have been some interventions aimed at developing the sector, a lot still needs to be done.

Thoughts are in the pipeline to set up an SME as an organ to link SMEs to stakeholders critical to their success. We spoke to president of the Small and Medium Enterprises Association (Smea), JAMES CHIUTSI

What are the challenges that SMEs in Malawi face?

SMEs face a number of problems such as inadequate and timely banking facilities, skilled manpower, limited capital and knowledge, non-availability of suitable technology, low production capacity, ineffective marketing strategies, identification of new markets, constraints on modernisation and expansion, non-availability of research and development facilities and follow up mechanisms with various stakeholders and various government agencies to resolve problems

How will the chamber solve these problems?

The rationale behind the establishment of the chamber is the realisation that there is strength in unity.

The chamber will establish a structure that assures continuity which ultimately will give confidence to its diverse stakeholders. The chamber aims to establish a full time secretariat with permanent staff. Most of the business associations we have in Malawi do not have full time offices leading to them being run as personal estates, with no assurance of going concerns at all. It is very difficult for them to get serious partners due to these suspicious governance structures.

This chamber will be unique in that its membership will be very encompassing; it will incorporate Industry sector based associations, business clubs, cooperatives individual SMEs, even large corporations who might want to interact closely with SMEs

The chamber will provide unique support to SMEs, the youth and women entrepreneurs and start-ups to help them convert business ideas and new concepts into

profitable business ventures as well as strengthening family managed businesses for better development as well as transition and transformation.

Why can’t the SME association do that?

Smea was introduced in 2014 and in its inaugural strategic plan, it dedicated the first three years to embark on massive advocacy and awareness programmes. We are glad that over the three years, issues of SME development have become a prominent discussion topic in the business circles.

However, we conducted an internal research that showed glaring weaknesses in the SME landscape in Malawi.

1. The organisational set up (all voluntary) of the executive committees and officers in Smea and other business groups bring a lot of challenges as far as consistency and continuity, as a going concern, are concerned.
2. The need to reach out to the “missing link” like enterprises that are deemed to be too big to belong to SME associations, at the same time, too small to belong to the Malawi Confederation of Chambers of Commerce and Industry. These enterprises are equally crucial to the economy as their contribution is key.
3. The need to set up a professional body capable of acquiring expertise to handle the diverse business needs of today’s global business activities, this requires an approach that aggregates expertise from several business organizations and individuals
4. Some partners, like financial institutions, universities have not seen Smea as a going concern due to lack of a full-fledged secretariat. The same fear exists towards several business groups in the country.
5. A well constituted secretariat will be able to aggregate support and raise funds for the chamber’s administration while at the same time, delivering on its mandate to chamber members for example, growing their businesses and ensuring a vibrant SME sector.

What are the objectives of the chamber

The chamber aims at providing a better business environment by unifying SME associations, cooperatives and business clubs. This will be achieved by broadening local and international networks, exploring business opportunities, accessing better skills, carrying out lobbying and advocacy activities and increasing quality production to improve SME competitiveness.

The chamber will also provide business groups with more bargaining power due to the prevalence of common business opportunities and challenges applicable to many industries. For issues specific to a particular sector, the chamber will be better positioned to handle that.

What activities have happened so far?

We have formed a task force made up of members from a number of associations and business groupings, charged with the responsibility of assuring that the chamber becomes efficient. We have contacted other SME chambers in near-by countries to bench mark.

We have also been in touch with potential financiers but we realise that the chamber will need to sustain its own operations in the future.

We have also engaged government through the Ministry of Trade and Tourism and the Small and Medium Enterprises Development Institute.