Africa-Press – Malawi. Small and medium-sized enterprises (SME) have renewed calls for the establishment of a standalone Ministry of MSMEs and Cooperative Societies, as operators describe the current business environment as increasingly challenging.
In an interview, National Association of Small and Medium Enterprises National Coordinator William Mwale said SME operators face mounting obstacles, including limited access to affordable loans and punitive interest rates that stifle growth potential.
Mwale criticised the lack of political will from authorities to effectively support development facilitation services for SMEs, noting insufficient incentives to help businesses participate in the country’s industrialisation agenda.
He called for the establishment of a dedicated Development Facilitation Bank, citing successful models in India and China that have boosted their respective SME sectors.
“How can you promote value addition in an environment where there is no easy access to soft loans with long-term repayment periods, say five to ten years? We are dealing with high and punitive interest rates, no tax holidays even for high-performing enterprises,” Mwale told Business Times.
The criticism comes as the sector, which globally accounts for 90 percent of businesses and 60–70 percent of employment, according to United Nations (UN) data, struggles with inadequate government support structures.
The challenges facing SMEs mirror broader economic difficulties highlighted in the Malawi Confederation of Chambers of Commerce and Industry (MCCCI)’s 2025 First Quarter Economic and Business Review.
MCCCI painted a similarly bleak picture, citing high inflation, persistent foreign exchange shortages and a widening trade deficit as major obstacles to private sector growth.
The business lobby group also warned that the political climate could become volatile as the country approaches elections, further threatening the economic environment.
The UN, marking this year’s MSME Day commemorations, described the sector as vital for driving inclusive growth and sustainable development due to businesses’ size and flexibility.
However, UN officials acknowledged that many MSMEs operate under difficult conditions, lacking access to financing while facing poor infrastructure challenges.
“Many operate informally, which limits their access to funding, legal rights and government support. Today’s global challenges, such as political tensions, climate change and digital transformation—make it even harder for them to survive,” the UN said.
The organisation called for improved policy frameworks and greater access to financing to help MSMEs succeed in an increasingly complex operating environment.
Globally, MSMEs contribute 50 percent of GDP while providing the majority of employment opportunities, making their success critical to economic development strategies.
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