Entrepreneurial financing and advisory firm, Business Partners International (BPI) has reiterated the need to support Small and Medium Enterprises (SMEs) to aid their crucial role in driving economic growth, despite current market pressures.
World Bank data indicates that SMEs contribute up to 40 percent of (GDP) Growth Domestic product in emerging economies and generate the majority of new employment opportunities, underscoring their importance to national development.
The sector faces significant challenges in Malawi, including high inflation rates driven by escalating food and fuel prices, while the depreciation of the kwacha has increased import costs, squeezing business margins.
However, BPI Country Manager Bond Mtembezeka said opportunities exist across various sectors despite these challenges.
He said BPI provides business loans for equipment purchase, working capital, and commercial property acquisition, complemented by technical assistance through experienced mentors.
Meanwhile, BPI has supported numerous local enterprises, including construction firms acquiring automated block-making machines and businesses investing in commercial premises.
“Malawi’s growing population and increasing urbanisation are creating demand in agriculture, construction, retail, and renewable energy. These sectors present significant growth potential for SMEs.
“Our approach goes beyond just providing capital. We work closely with entrepreneurs to develop tailored financing solutions that align with their specific needs and growth aspirations,” Mtembezeka said.
Economic analyst Elisha Daniels emphasized the importance of comprehensive support for the sector.
“Access to affordable credit remains a major barrier as traditional lenders often consider SMEs high risk due to limited collateral and inconsistent cash flows. This is where specialized financing solutions become crucial.
“Government, financial institutions, and development partners must work together to create an enabling environment. This includes improving access to finance, enhancing infrastructure, and providing capacity-building programmes,” Daniels said.
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