55% startups died in 2019 – Nasme

Post was last updated: January 2, 2020

National Association of Small and Medium Enterprises (Nasme) has said 55 percent of startup businesses died naturally in the year 2019 mainly due to lack of experience.

In an interview yesterday, National Chairperson of the Association, William Mwale, said many of the businesses that could not be sustained were headed by people that had just graduated from institutions of higher learning but also people that did not want to seek for advice from experienced entrepreneurs.

This comes against a background of a controversial election and demonstration that were the main highlights of the year which crippled the flow of business.

Mwale however said the 45 percent startups that survived are encouraging.

“Theory and practical are quite different parameters, when one graduates from college and knows profit and loses it does not guarantee that they can run businesses successfully, when it comes to practical they face some challenges for example the demonstrations that were conducted in the year, businesses would not run for three days at most it becomes an issue or perharps they imported some materials and are not in on time it becomes an issue so it was a lost opportunity for Malawi in that the SME sector could have grown and enhance the growth of the economy.

“…but saw some whose assets have increased, they were able to pay bills every month and service their loans so there is hope that once the environment improves a lot of businesses will be hatched and sustained in the country,” Mwale said.

In an earlier interview Executive Director of the Chamber for Small and Medium Enterprises, James Chiutsi, said Malawi’s export market is largely monopolized by large scale industries hence the small scale sector requiring deliberate support to excel.

“Local industry performance has been negatively affected by uncertainty brought about by the political environment existing before and after the elections.

“Most of our exports are raw and the few that are processed are not to that high standard, due to constraining factors because adding value requires huge investments in terms of right machinery and as such SMEs cannot afford on their own and need support from government institutions,” Chiutsi said.

He added that they want to engage government because most of the emphas is on exports is on agribusiness and yet other sectors like furniture manufacturing are given little attention yet the country is importing the same in very large volumes.

“It’s high time the country invested in local production by deliberately supporting and financing SMEs who venture into such. It has been very difficult for our products to match those of international standards when we are using hand equipment and substandard machinery, and skills development is required too,” Chiutsi added.

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