Small and medium enterprises rate 2021 as mixed bag


Small and medium enterprises (SMEs) have described 2021 as a mixed bag owing to continued economic challenges that affected flow of business despite the government putting in place legislation aimed at supporting the sector.

In an interview Thursday, Malawi Union of Small and Medium Enterprises President Barbara Banda said the enacting of the SME order in the year means indigenous Malawians, including small businesses, will be participating in government contracts at 60 percent.

She said the government, being the biggest buyer, will enhance a lot of cash inflows into SMEs.


However, Banda was quick to mention that the shrinking of the economy and the weakening of the Kwacha affected imports and the capital capacity of SMEs to really participate in business activities.

“Access to finance has been a perennial problem because interest rates are high and this has a negative impact on SMEs because they cannot absorb huge interests especially when they participate in businesses where they get payment after 90 days; it erodes their cash flow.

“Covid is still with us and still at play; this means that the number of customers in market places remains reduced and this is, therefore, affecting businesses,” Banda said.


In a separate interview, SMEs Chamber Executive Director James Chiutsi said despite the political will from the presidency, there are other government departments that are yet to start following dictates of the SME Order.

“Much as government is giving business to SMEs we encourage them to take a step in other aspects; for example, ensuring that payments are made according to agreed terms. We have noted that other payments are taking over a year and some SMEs have folded up because they can no longer supply products.

“The current tax regime especially on financial services and ICT products, is not conducive for growth of businesses especially the SME sector. These should be looked at,” Chiutsi said.

He added that 2022 brings hope, especially because SMEs will continue to engage government.

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