The Ministry of Industry and Trade has said micro, small and medium enterprises (MSME) policy and strategy will be launched early this year.
In an interview recently, spokesperson for the ministry, Wiskes Nkombezi, said the policy will help to define MSMEs for easy target of any government interventions.
“Government outlines policy directions in terms of access to technology and mainstreaming gender into MSMEs as there has been an outcry that this group was omitted in the last policy. So, in essence, the policy will help government to mainstream cross-cutting issues and develop SMEs,” he said.
Malawi has about 760 000 SMEs which generate an annual revenue of about $2 billion (K680 billion) and create employment for over one million people.
The survey, among other things, established that about 60 percent of SMEs do not use financial services. To manage business finances, most SMEs keep their money at home.
The survey says only 22 percent use products or services offered by commercial banks while 13 percent use formal, but non-bank financial institutions.
On savings, the survey established that about 66 percent do not have or use savings products while 13 percent rely on informal mechanisms such as savings groups.
But local banks have now started recognising the importance of SMEs and they are providing them with loans.
Indebank, for example, recently pledged that it will start providing loans and overdrafts to help SMEs to grow.
The bank’s chairperson Isaac Nsamala noted that the country will transform its economic status if SMEs are supported.
“We are currently talking of boosting Malawi’s export base. The majority of people in the agriculture sector are SMEs.
“But how do we help these people so that they can grow more crops and market them? It is only when we support them by giving them loans and overdrafts, among other things,” said Nsamala.
Micro businesses are defined as those who employ one to four people, small businesses have five to 20 employees while medium ones have 21 to 100.