SME: Still the weak backbone of the economy

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SME Still the weak backbone of the economy

In the last Budget, the government had the vision of “fostering a wave of modern entrepreneurs.” In this context, various measures were announced. One year later, not all of those measures have been implemented. Some small and medium enterprises (SMEs) are still facing numerous issues which have been talked over for years. Hoping for better measures, SME are crossing fingers till 8 June.

Vijay Ramgoolam: “SMEs are still struggling for survival”

Former director of the Small and Medium Enterprises Development Authority (SMEDA), Mr Vijay Ramgoolam, argues that since the last Budget not much has been done or accomplished. For him, SMEs are still struggling for their survival. “The three main obstacles SMEs face are: access to finance, visibility, and access to technology. Since the last Budget, there have been no major changes. SMEs today still face the issue of financing. They are unable to pay their hefty debts. The government needs to come up with a solution to help them reimburse their loans as well as ease the access to finance. The rate of interest should be reduced.”

Another issue which should be urgently addressed is the visibility of SMEs. “Many local products are not visible and accessible to the public. Fairs must be organised in different regions. Their products must be visible on the local market. Another issue to be tackled is facilitating access to technology. The government should introduce grants to allow SMEs to benefit from new technologies.”

Mr Ramgoolam expects the government to promote innovative products. “Many SMEs have interesting ideas but there are no schemes to help them develop their ideas. The government must initiate schemes helping them to buy their equipments and launch their business. Besides, emphasis must be laid on training start-ups, as well as existing SMEs. Small businesses should be able to improve the quality of their products. Trainings should be promoted.”

The former SMEDA director feels that setting up industrial parks for SMEs is not a solution. He believes that instead of industrial parks, the government must provide land leasing to some SMEs who show interest in opening a small workshop. “When we refer to SMEs, it should not be limited to food or handicraft products. We should also tap into ICT, agriculture and fishing sectors.”

Marie Noëlle Elissac-Foy: “It’s time for action” 

Marie Noëlle Elissac-Foy, co-founder of Smart Moves for Entrepreneurs, claims that the government promised to boost the SME sector but during the last three years, nothing much has been done and expectations are still high. “It is time for action now. SMEs are lagging behind with the same issues cropping up. Till now, no proper solutions have been found to improve access of finance. The whole process must be reviewed. The needs of the local market must be studied.”

She further underlines that in the last Budget, the government contemplated merging SMEDA with the National Women Entrepreneur Council. Once more, nothing has been heard of this measure. “Recently, a 10-Year Master Plan has been released. Much has been planned and now, we hope to see some actions. The Prime Minister is also the Finance Minister, everything is in his hands. So he needs to decide about the fate of SMEs.”

Marie Noëlle Elissac-Foy highlights that industrial parks is not important in the local context. “There is a need to link SMEs with the requirements of society. Mauritius is already embarking on major projects, so why not include SMEs on those. For instance, at the Metro Station, SMEs could get something. Why not use these platforms to create visibility for small businesses. Just creating buildings or infrastructures will never solve the issues.” 

Phalraj Servansingh: “The foundations have been laid”

The Managing Director of SMEDA is very optimistic for the upcoming Budget. Mr Phalraj Servansingh reveals that propositions have been submitted to the Minister of Finance. According to him, the two major issues for the SMEs are: labour and access to finance. “Since last year, much has been done in the SME sector. The handicraft operators have had increased visibility. More training has been offered to SMEs in different fields. Surely, one cannot claim that there has been no improvement since the last Budget.” The 10-Year Master Plan will provide a boost to the sector, he adds. “The foundations have been laid. We need two or three years to see the results.”

Dr Pramod Jaddoo: “There is continuous need to boost up this sector”

Measures to help SMEs have been on the agenda of successive governments over the years, says economis Dr Pramod Jaddoo. Numerous measures have been announced in past Budgets. “Given the changing business environment, there is a constant need to boost this sector. SMEs face some practical difficulties such as access to finance. The Budget must provide incentives to facilitate SMEs in competing with businesses locally and internationally. Some of the incentives include tax holiday, investment facilities and infrastructure.”

Commenting on the visibility of small businesses, he says: “They are scattered over the country. So, there should be a program to regroup them in such a place where they are accessible and their products get the necessary exposure. Why not create

§ SME zones in Mauritius, Rodrigues and Agalega?”

For access to finance, he underlines that there are already some measures taken but still the main issue is that cost of borrowing is often high for the SMEs. “The government must find a way to extend the duration of repayment. Usually, it takes time for a business to settle down. So, reviewing the modes of payment will be an additional benefit for SMEs.”