Minister of Finance wants to promote inclusive growth by stimulating the SME sector through reforms are to support institutions. Thus, it was decided that Enterprise Mauritius now guide its actions on export promotion and development of new markets particularly in Africa and emerging economies.
In the same vein, the Development Bank will be transformed into a development agency financial (Development Finance Agency) to better support SMEs. The DFA does not directly provide loan facilities, except in cases where the financing market is not available especially at the micro-credit start-ups of Rs 5 million and existing qualified customers.
This new agency will also provide guarantees to cover risks and other instruments to encourage commercial banks and financial institutions to lend to SMEs. SMEs operate, according to the minister, within a new institutional framework result of a possible merger of the Small and Medium Enterprises Development Authority (SMEDA), the National Productivity and Competitiveness Council (NPCC), the National Institute for Cooperatives Entrepreneurship (NICE), the National Women Entrepreneurs Council (NWEC) and Enterprise Mauritius (EM).
The new body will be under the supervision of a Unified Business Enterprise Board which will relate to directly to the Minister. It will be financed by a new Business Growth Fund will replace the Saving Jobs and Recovery Fund.
The Economic Restructuring and Competitiveness Program provide guarantees to assist SMEs to raise working capital and have other banking facilities. Economic diplomacy will be used in relying mainly on the circular migration program with France to act as an incubator for SMEs.
the same concern of industry consolidation, the government will seek international assistance to develop a program of 'capacity building' for commercial banks that wish to engage into a new market segment related to SMEs. But also instruments to reduce the indebtedness of small contractors partnerhip revisiting the EMS Fund.
To boost the financial restructuring of heavily indebted companies, the Ministry of Finance is currently working with the Stock Exchange of Mauritius for the establishment of a new component of ERCP in the Development and Enterprise Market (DEM). To encourage this listing, the SEM will be expected to reduce the cost of trading in this segment of the DEM. Also, the agency will provide facilities to stock these companies to issue instruments of debt conversion.
SOEs will be invited to follow suit and those with large financing needs should make 'Corporate Bonds' .
KEY MEASURES
~ The DBM will be transformed into a development agency for financial support SMEs
~ The SME support agencies will merge into one entity
~ ERCP will provide guarantees assisting SMEs to raise working capital and to benefit from banking facilities
~ SOEs with large financing needs may issue 'Corporate Bonds' .
BUSINESS MAGAZINE No. 955 - 22 to 30 November 2010
Villen Anganan
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