I was reading a research report recently and I was amazed by the current state of the SME sector in Africa. While SME owners are working hard to expand their business, there is little support within the business environment in their favour.

Most support and policy decisions tends to go towards the micro enterprises or the highvalue, low-risk corporate clients. Even the financial services sector has leaned towards the same culture.

My conversations with SME business owners confirms this research findings. Many people, who have been in business for the last five years or so, already know what can turn their business in a multi-million shillings venture.

However, many businesses stagnate. This is because there are very few growth financing options that are available to expand the enterprise.

For instance, a friend of mine has been in the electronics business for the past six years. During this time, he has managed to get a set of customers.

All along, his business has been importing goods from the manufacturer’s agent, who is handling the Middle East and Africa region, in Dubai. This entrepreneur knows that he would sell at a better price if he imported directly from the manufacturer.

The manufacturer, however requires that a distributor meets certain order quantities. While the volumes can be readily consumed in this market, he has trouble raising the amount of capital to meet the manufacturer demands as well as expand his venture to handle the sales and support for the local market.

When he approached his bank, he was asked to provide financial statements as well as a matching collateral. Having been in business for just six years, with the earlier years being a startup phase, the business does not have assets, whose value can secure the needed financing.

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