SMEs key to poverty reduction, Socam says

from The Daily Times

BY HENRY MCHAZIME

Entrepreneurship, establishment and promotion of Small and Medium Enterprises (SME’s) is the only way through which the majority of the population could be lifted from the jaws of poverty, delegates at the just ended annual conference for Society of Accountants in Malawi (Socam) held in Mangochi said.

In his presentation entitled ‘Saving for investment: Strategies for wealth creation’, market analyst and Chief Executive of Alliance Capital Limited Godfrey Jowah said although it was always difficult to get into business, SME’s growth should be encouraged.

“Internationally, 90 percent of businesses that start fail but there are ways of enhancing chances of success by working with a proven idea that could be replicated by finding demand and supply into that market,” said Jowah.

He added that it is better to give each business a chance, but diversification becomes the solution.

“The more products one sells, the more market outlets that have to be established. So it is better to handle your finances prudently,” Jowah said.

In his remarks, East African based economic commentator Patrick Lumumba said the duty of reducing poverty lies in all African governments, saying donors could not be relied upon to invest in infrastructure development.

“If there is no effort to set up proper infrastructure, we will be putting those in the lower class at a disadvantaged position because they are trying hard to lift themselves up from economic hardships,” Lumumba said.

He commended African Development Bank (AfDB) for providing funds for, among other things, road construction, saying transportation forms an integral part of economic progress.

“But it has to be emphasized, SME’s are the driving force for innovation and job creation in the west and African countries would do well to have their full participation to achieve faster economic growth,” Lumumba said.

Of late local entrepreneurs have called for the smooth access to finance through bank loans and other funding requirements.