Emerging markets announce measures to boost small firms
A range of new measures to give small firms a boost have been announced in several emerging markets.
Small businesses are the engine of growth. That’s what we’re often told in the UK as authorities work to improve trading conditions for small and medium-sized enterprises (SME) – and it’s hardly surprising, considering that they constitute the vast majority of the UK’s companies and employers.
Of course, the same is also true around the world. Especially in emerging markets, authorities are working to give SMEs a boost in a bid to encourage growth and stimulate further development. The past few days have seen a number of measures announced across several Asian and African economies to kickstart economic expansion.
Malaysia allocates new resources
Malaysia’s Ministry of International Trade and Industry (MITI) is working to boost the rate of market growth among SMEs from 6.3 to 9.3 per cent by 2020, ensuring that the sector can contribute at least 41 per cent to the nation’s gross domestic product (GDP).
That’s according to Mustapa Mohamed, minister for trade, who announced on Monday (November 17th) that the government is continuing to grow SME finance options. In the 2015 Budget, 18 programmes have been allocated a collective RM14.3 billion (£4.26 billion) to help develop SMEs, with particular focus on the services sector, smallholders, micro-enterprises, women and co-operatives.
He added that SMEs need to develop their management and financial skills to make the most of the support that’s available – a combination that should give the sector a new lease of life.
Nigeria launches growth fund
Nigerian president Goodluck Jonathan launched a new SME growth fund worth $50 million (£31.9 million), which will be used to support the work of young entrepreneurs.
The pot will act as vital seed capital that will be used to enhance the country’s existing Youth Enterprise With Innovation in Nigeria (YouWIN) programme, allowing 18-45 year-olds to either grow existing or start new businesses. It’s hoped that this will help to attract further international investment into the country, as well as building its reputation as a promising business destination.
The YouWIN programme facilitates entrepreneurialism by supporting young businesspeople, in the expectation that they will realise their business plans and employ other young people. This helps to raise incomes and keep the country growing.
Thai SME Bank improves access to finance
SME Bank in Thailand has signed a memorandum of understanding with the Federation of Thai Industries (FTI) that will mean small firms have better access to financial services via FTI’s regional offices.
By increasing co-operation between business associations and lenders, it’s hoped that small firms will be able to access finance more quickly. SMEs are expected to find that the time required to apply and be approved for a loan decreases substantially, which could help to bolster their growth plans or shore up cash flow.
Smaller value loans can already be covered by government loan guarantee schemes if SMEs don’t have enough collateral to borrow from banks.
Policy development in Gujarat, India
The regional government of India’s Gujarat state is working on fresh policies to encourage SMEs and promote industry in the state.
The Economic Times reports that authorities are working on two new initiatives. One will promote the Make in India campaign, which is being run by the central government in New Delhi as a means of attracting investment and boosting the nation’s manufacturing industry.
But the other will represent a first for Gujarat – a specific startup policy that will be intended to ignite and fan the flames of entrepreneurship in the state. It appears that authorities at every level around the world are embracing the potential offered by SMEs and startups, and it’s likely their economies will demonstrate the results in the next few years.