Small and Medium Enterprises Development Institute (Smedi) says access to finance and capacity development are key to promoting enterprise development.
Speaking at the Institute of Chartered Accountants in Malawi (Icam) Annual Lakeshore Conference in Mangochi on Friday, one of the speakers, Smedi chairperson Temwani Simwaka said many young people are failing to realise their entrepreneurship dream because of lack of mentorship, funding and skills.
She said: “To be an entrepreneur, you could be as creative as you need to be but you still need to be polished, trained and hand hold. Beyond that, you start seeing with different eyes and perspective.
“Government needs to work with other agencies to help emerging entrepreneurs as most of them have brilliant ideas, but lack funding and knowledge of turning the idea into a product.”
Simwaka, who is also Standard Bank plc chief financial officer, advised young entrepreneurs to exercise patience, resilience and willingness to do a lot of work if they are to be recognised.
In Malawi, majority of micro, small and medium enterprises (MSMEs) still fail to access finance despite the sector being a significant source of employment, providing jobs to 1.6 million people, according to the World Bank.
In its July 2020 Malawi Economic Monitor, the World bank said only 10 percent of medium enterprises, five percent of small enterprises and three percent of micro- enterprises have access to credit from commercial banks.
This is despite the country having 60 percent of businesses being micro-enterprises (employing one to four people), 32 percent being small enterprises (employing five to 20 people) and only eight percent being medium-enterprises (employing 21 to 99 people).
Chamber for Small and Medium Businesses Association executive secretary James Chiutsi is on record as having said that small businesses are still facing access to finance challenges due to strict collateral requirements.
He said this is despite the country having several entrepreneurs with sound business ideas but haveno means to acquire assets.