Malawi's micro, small and medium enterprises (MSMEs) are finding it hard to grow because they cannot easily access loans, struggle to expand their businesses, and have problems entering formal markets.
To help solve these challenges, the Ministry of Industrialisation, Business, Trade and Tourism, together with its partners, has introduced a special business support programme.
This week, the ministry, working with the World Bank-funded Southern Africa Trade and Connectivity Project (Satcp), launched a five-day business boot camp. The aim is to help promising small businesses become strong, well-organised, and ready to attract investment, especially within the Nacala Development Corridor.
The programme comes at a time when interest rates are very high, around 35 percent. On top of that, banks demand strict collateral, and many entrepreneurs lack proper business plans. As a result, many small business owners are excluded from formal financial services.
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Griffin Chiundiza, founder of Grow Together Farms and a participant in the boot camp, said he has never tried to get a loan because the conditions are too tough.
"Interest rates are too high, and the collateral needed is beyond what most small businesses can provide," he said.
Even businesses with good products remain stuck at the lowest level of the market. Victor Mponda, a soya bean farmer, said Malawi mostly exports raw products instead of processed goods.
"We sell soya as grain, yet the real value is in products like soya milk and yoghurt. The problem has been lack of capital, technology and skills to grow," he said.
Satcp project manager Hastings Ngoma said the boot camp is meant to close the gaps that prevent small businesses from getting funding.
"We are training firms to prepare strong and realistic business plans. Those that perform well will qualify for grants between $15,000 (about K26 million) and $25,000 (about K44 million)," he said.
The entrepreneurs were selected from 1,308 applicants, meaning only the top 30 percent were chosen. Together, they are seeking over $7.7 million (about K13 billion) in funding, showing how big the demand for business finance is.
The training focuses on improving business planning, market research, financial management and how to present business ideas to investors.
Sycamore Consult managing director Audrey Mwala said poor financial management is a major problem for many businesses.
"Most small firms do not keep proper records. They mix personal and business money and cannot clearly show how their businesses are performing," she said.
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The programme also encourages businesses to think beyond Malawi and target regional markets.
Satcp is a six-year project worth $150 million (about K263 billion). It focuses on 11 key products such as soya beans, rice, groundnuts and honey, aiming to promote trade along the Nacala Corridor.
Some entrepreneurs are already working on new ideas. Yvonne Kaphamtengo, co-founder of Yvespro Consult, said her company is building a digital platform to connect producers with buyers.
"Many entrepreneurs can produce goods but fail to find markets. This training is helping us link suppliers to customers, both locally and internationally," she said.
Although the programme offers grants, its main importance is the new approach it promotes. Instead of giving handouts, the focus is now on building strong businesses that can add value and compete in real markets.
According to the Finscope Survey, Malawi has over 1.6 million MSMEs. They contribute about 40 percent to the economy and provide 24 percent of all jobs in the country.
