Micro, Small, and Medium Enterprises (MSMEs) are useful tools for poverty eradication due to their contributions to job creation, economic growth, and empowerment of vulnerable populations.
These were the sentiments of His Excellency Mr. Edward Kallon, the UN Resident and Humanitarian Coordinator in his remarks today at Chimhoyi University of Technology at the Commemoration of International Day of Micro, Small and Medium Enterprises.
It was held under the Theme: “Empowering MSMEs for a Resilient Future – Leveraging Power and Resilience of Micro, Small and Medium Enterprises to Accelerate SDGs and Eradicate Poverty in Times of Multiple Crisis.”
There were several dignitaries in attendance, including Honourable Monica Mutsvangwa, Minister of Women Affairs, Community, Small, and Medium Enterprises Development; Honourable Marian Chombo, Minister of Provincial and Devolution Affairs for Mashonaland West; Honourable Dr. Jenifer Mhlanga, Deputy Minister of Women Affairs, Community, Small, and Medium Enterprises Development; Mavis Sibanda, Permanent Secretary of the Ministry of Women Affairs, Community, Small, and Medium Enterprises Development; Senior Government Officials; and representatives of the Zimbabwe Chamber of Small and Medium Enterprises.
“MSMEs are the backbone of economies globally. Their significant contributions to job creation, economic growth, and empowerment of vulnerable populations are undeniable.
According to the International Labour Organization, MSMEs make up more than 90% of all businesses and account for a staggering 60 to 70% of employment and roughly 50% of global GDP (ILO, 2019).
These figures alone underscore the profound impact of MSMEs in fostering economic resilience and sustainable development.
“The theme for this year’s commemoration, “Leveraging the Power and Resilience of MSMEs to Accelerate Sustainable Development and Eradicate Poverty in Times of Multiple Crises,” is not only timely but also critical.
The world is facing unprecedented challenges, from economic instability to the impact of climate change such as the current El Nino induced severe drought and global pandemics.
MSMEs have withstood the worst of these crises and continue to show remarkable resilience,” HE Kallon said.
In Zimbabwe, the story of MSMEs is a testament to resilience and innovation. Amidst economic downturns, hyperinflation, and a challenging business environment, MSMEs in Zimbabwe have continued to thrive, providing livelihoods, and fostering community development including in the informal sector.
He shared the story of Ms. Chipo (name changed for privacy), an entrepreneur from Harare whose small garment business nearly collapsed due to COVID-19.
However, leveraging her ingenuity, she pivoted to producing face masks. Today, her business not only survived but expanded, employing more women in her community, and contributing to the local economy.
Despite their resilience, MSMEs in Zimbabwe face significant challenges. Chief among the challenges is limited access to finance: Only 41% these in least-developed countries, including Zimbabwe, report access to finance as a major constraint (World Bank, 2020).
Technological barriers are also a stumbling block.
The lack of access to modern technology and digital tools inhibits productivity and global competitiveness. MSMEs also face challenges in Market and Supply Chain Access.
The restricted integration into global markets and supply chains limits their growth potential.
Regulatory and Administrative Burdens: also provide a nightmare for MSMEs. Complex regulations and high compliance costs add to MSMEs’ difficulties.
To harness the full potential of MSMEs and align their contributions with the Sustainable Development Goals (SDGs), HE Kallon said strategic interventions are required with the following policy recommendations:
- Enhance Access to Finance: Developing Microfinance Institutions through the establishment and growth of microfinance institutions catering specifically to MSMEs’ needs is key. Financial Inclusion Programmes that provide MSMEs with affordable credit and comprehensive banking services is critical.
- Promote Technology Adoption: Digital Transformation that includes supporting MSMEs in adopting digital technologies through training initiatives and subsidies is critical. There is a need to improve ICT Infrastructure by investing in robust ICT infrastructure to facilitate MSMEs’ engagement in the digital economy.
- Facilitate Market Access: Trade Facilitation by simplifying trade procedures and reducing barriers to market entry for MSMEs is important. There is a need to support Supply Chain Integration by fostering Micro, Small and Medium Enterprises to Accelerate SDGs and Eradicate Poverty in Times of Multiple Crisis.