Small firms facing barriers to grow

Malawi’s micro, small and medium enterprises (MSMEs) are struggling to breakthrough due to limited access finance, scaling challenges and difficulties to integrate into formal markets, it has been established. But the Ministry of Industrialisation, Business, Trade and Tourism and its partners have moved to address the constraints through a targeted business initiative. This week, the ministry in collaboration with the World Bank-funded Southern Africa Trade and Connectivity Project (Satcp), have rolled out a five-day business boot camp to turn high-potential MSMEs into bankable, investment-ready firms capable of competing along the Nacala Development Corridor.

The programme comes at a time high interest rates hovering around 35 percent, rigid collateral requirements and weak business planning have pushed many small-scale entrepreneurs out of the formal finance system. “I have never attempted to get a loan because the interest rates are high and the collateral requirements are beyond most micro, small and medium enterprises,” said Griffin Chiundiza, founder of Grow Together Farms, one of the firms participating in the boot camp. Even firms with viable products remain stuck at the bottom of value chains with Victor Mponda, a soya bean producer, saying Malawi continues to export raw produce while value is captured elsewhere.

“We sell soya as grain, yet the real value is in products like soya milk and yoghurt. The challenge has been capital, technology and the skills to scale,” he said. In an interview yesterday, Satcp project manager Hastings Ngoma said the business boot camp is designed to address the gaps that keep MSMEs locked out of financing.

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“We are building capacity so that firms can develop bankable projects. From this process, qualifying businesses will access grants ranging from $15 000 [about K26 million] to $25 000 [about K44 million].” The training has brought together entrepreneurs selected from 1 308 applicants, placing them in the top 30 percent of high-potential ventures nationwide. Collectively, they represent funding requests exceeding $7.7 million (about K13 billion), underscoring the scale of unmet demand for enterprise finance.

The boot camp focuses on strengthening business models, market analysis, financial projections and pitch readiness, areas often cited by banks and investors as critical to the success of MSME funding applications. Sycamore Consult managing director Audrey Mwala said weak financial discipline remains a major structural constraint. “Many businesses operate without proper financial records. They mix personal and business finances, cannot track performance and cannot present credible projections to investors,” she said

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