SME Report : local entrepreneurs in Mauritius

MCB teamed up with DCDM Research to investigate local entrepreneurial mindset, motivations and behavioural engagement. In this article, a comprehensive summary of the report is given to better understand this sector.

The report aims to put the spotlight on the individuals who are behind the businesses and highlights their views on what it takes to be a successful entrepreneur. The journey and profiles of the various participants in the research may be as diverse as the businesses they run, yet there are many unifying factors in the ways in which they achieve their goals.

Local SME Outlook

The report highlights that the incentives and facilities offered to companies during the 1980s triggered the emergence of a new breed of entrepreneurs, who integrated the value chain of larger enterprises or provided services to the population at large. “As per the last Census of Economic Activities (CEA) conducted in 2013, the number of small production units1 stood at 125,543 up from 92,400 in 2007 representing a 36% increase. At least one third of the SMEs operate in the wholesale and retail trade sector. The following pie chart depicts the breakdown of SMEs by business sector.”

SME’s Contribution to local economy

The report emphasizes that the SME sector contributes approximately 40% to the GDP and employs around 300,000 people in the country (55% of total employment).

SME Financing Scheme

In the report it is clear that Rs 7.9 billion was approved as credit facilities under the SME Financing Scheme over a time span of five and half years with an average credit amount of Rs118 million approved per month for SMEs.

Entrepreneurs’ Profile

According to the surveys, four distinct profiles were identified among entrepreneurs who participated in this study. Almost 75% of the surveyed entrepreneurs are either builders or independents. Each profile is grounded in personal motivation and each has a different path to success:

• The builder

The report states that the builder is a hard worker who always gives his best for the success of his business. “Built through sleepless nights, uncertainty and stress, his business means the world to him. He dreams big and sometimes sets unreasonable objectives, but is above all, passionate about his work.”

• The innovator

The innovator is a visionary, buzzing with ideas, observers the survey. “His vision is to change the world around him, one of which being his greatest accomplishment through his business. He measures the social impact of his product and needs to stand out from the crowd. Moreover, he turns his goals into something he actually enjoys doing. His biggest motivation is the implementation of his ideas while considering the importance of making things happens.”

• The opportunist

The report clearly demonstrates the opportunist is skilled while having great competencies and a well-established client network. “His business reflects his level of experience. He can detect a good opportunity when he comes across one and understands the needs and wants of consumers. Thanks to the profits generated by his business, he now has a better and more comfortable standard of living.”

• The independent

As for the independent, working for others is not an option for him, says the report. “Being fully independent, he has the desire and need to feel free, in order for him to reach his full potential, and to make decisions. Audacity and courage are two of his main personality traits, and he is therefore not afraid to take risks.”

Entrepreneurs’ Mindset

The report highlights that among factors that motivate the local entrepreneurs to start their own business are their need for freedom and independence.

Characteristics of Successful Entrepreneurs

The five most important qualities required to become a successful entrepreneur:
1. Have a vision and think in the long term
2. Be passionate
3. Be determined and persevering
4. Ability to adapt to changes/ be honest
5. Always listen to customers and market needs

Purpose of Business Profits

In the report, around 77% of local entrepreneurs think that profits made should be reinvested in the business.

Start of Business

Most of the surveyed entrepreneurs have created their own business starting from nothing.

Financing the New Business

One of the main questions in the survey has been financing. It has been observed that though the sources of financing are multiple, the bulk of it came from the entrepreneurs’ own funds. Around 86% of the entrepreneurs have done their own financing while around 15% have used private/public funds. Only 40% of the entrepreneurs have opted for bank loans.

Main difficulties

The lack of financing and support top the list of difficulties encountered by the local entrepreneurs when they started their business, underlines the report.

Time devoted to business

Entrepreneurs have to juggle between both personal and professional lives. Accordingly, 47% of entrepreneurs devote between 10 and 12 hours daily to their businesses. Around 34% of the entrepreneurs devote their time to the business at the expense of personal life. Another 28% balance their time between business and family.

Main Disappointments

Despite having their businesses, 48% of the entrepreneurs are disappointed with their cash flow, 42% are disappointed with difficulty to get credit facilities and 38% are dishearten with corruption in business.

The future   

The report also focused on how the local entrepreneurs foresee the progress and expansion of their business in the future. Most of the entrepreneurs (48%) see themselves diversifying their operations by offering a range of products and services, 43% of the entrepreneurs expect to recruit more and expand more and 42% of the entrepreneurs want to consolidate for enhanced business stability.

General feeling about the future

In spite of all difficulties and other constraints, local entrepreneurs are by and large quite optimistic about the future of their business.