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SADC and SMES
Posted by Daniel Makhura on 3 July 2017 10:05 AM SAST
Link between SADC and SMES.
SADC governments have adopted different policies, strategies and programmes to promote SMEs in their countries. On the whole, the policies and programmes have not been as effective as desired. The SADC-DFRC(Development Finance Resource Centre) aims to play a pivotal and catalytic role in this area through specially designed SME institutional support programmes to enhance DFIs’(Development Finance Institutions) delivery capacity and SMEs support at enterprise level.
The following constraints have been identified as facing SMEs in the SADC region:
On the financing side:
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Lack of medium to long-term finance for startups and expansions;
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inappropriate terms and conditions for short-term credit or trade finance;
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insufficient financing and other instruments to support the SME sector;
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low capitalization and lack of collateral; and
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poor record keeping or financial management
On the Business Support Side:
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low-level investment in infrastructure that has the potential to stimulate SME activity;
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complex and cumbersome laws and regulations that control and govern the setting up and development of SMEs;
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regulations that favour only big business and discourage SME start up and operation;
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inability to market SME products and services;
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absence of appropriate environmental management systems (ems) that meet international standards; and
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a dearth of programmes and, where they exist, uncoordinated programmes that support entrepreneurship with marginal support to women entrepreneurs.
As a consequence of these constraints the region has witnessed a proliferation of informal sector activity which needs to be transformed into formal businesses and integrated into the formal (taxable) economy. The DFRC has developed programmes and projects that will address these critical issues through the DFI Network and in collaboration with other development partners.
Lastly the SADC-DFRC is a subsidiary institution of SADC established as a shared central resource to promote capacity building, policy research and advisory work, and also to promote collaboration between Development Finance Institutions (DFIs) within the SADC region.
