The Bleak Outlook for SMEs in Mauritius

In a recent interview to Defi Media, Maya Sewnath, Vice President of the Small and Medium Enterprises Chambers (SME Chambers), painted a somber picture of the state of small and medium-sized enterprises (SMEs) in Mauritius, a sector often touted as the backbone of the country’s economy.

The SME Chambers’ proposals to the Minister of Finance during pre-budget meetings highlighted the long road ahead for this sector to see some light at the end of the tunnel.

The Post-COVID Rebound

The rebound was arduous and painful, with many SMEs struggling to recover from the economic contraction caused by COVID-19.

Sales were severely disrupted, affecting all sectors, including manufacturing, tourism, agriculture, education, and e-commerce.

The prices of raw materials skyrocketed, increasing production costs, while interest rates rose due to the extreme indebtedness of SMEs.

This perfect storm made it difficult for SMEs to overcome and sustain their businesses.

The Current State of SMEs

Fast forward to today, and the situation has only deteriorated further. Inflation and the depreciation of the Mauritian rupee have exacerbated the problems.

Many SMEs have already shut down or downsized their operations, with some even laying off staff. The lack of visibility on the future has led to a crisis of confidence.

State Support and Institutional Aid

The state and institutional support for SMEs are lacking, according to Sewnath. While some initiatives have been launched, the bureaucracy is too cumbersome for SMEs to benefit from them. Banks have also failed to provide adequate support.

Saturation and Innovation

The saturation of certain sectors is a major concern, with many entrepreneurs operating in similar niches.

Sewnath suggested that innovation is key to overcoming this challenge, but it requires state support and institutional backing.

Skills Development and Training

The need for skills development and training is another pressing issue. While some initiatives have been launched, they are insufficient. Sewnath emphasized the importance of providing women with training in entrepreneurship, marketing, and finance to empower them to take on leadership roles.

Access to Finance

Access to finance is another major hurdle for SMEs. While some initiatives have been launched, such as fintech and fundkiss, many entrepreneurs are unaware of these options or are hesitant to use them due to lack of information and sensitization.

Employee Training and Education

The level of training and education among SME operators is also a concern. While some institutions have launched initiatives, they are insufficient. Sewnath emphasized the need for more education on entrepreneurship and professional development.

Government Support

The government’s support for SMEs is also lacking. During the recent opposition meeting, no specific measures were announced for SMEs. Sewnath is hoping that this will be addressed in future initiatives.

New Forms of Marketing

Sewnath noted that traditional entrepreneurs are slowly adapting to new forms of marketing, such as social media platforms like TikTok, Facebook, and Instagram. However, more needs to be done to promote this type of marketing.

Subcontracting Opportunities

Opportunities for subcontracting between large conglomerates and SMEs are limited in Mauritius. Sewnath suggested that finding an agreement between these two groups could lead to growth and development.

The “Made in Mauritius” Label

The “Made in Mauritius” label is a concept that has potential but is not being effectively utilized by SMEs due to administrative hurdles.

Export Opportunities

Sewnath believing that there are vast opportunities for SMEs to export their products to niche markets in Africa. However, more needs to be done to raise awareness about these opportunities and provide training on how to navigate them.

In conclusion, the outlook for SMEs in Mauritius is bleak, with many challenges facing this sector. The government’s support is lacking, and more needs to be done to address these challenges.