SEED quality training contributes to the development of small and medium enterprises (SMEs) in Malawi. This helps increase local livelihoods in the green sector and tackles Malawi’s pressing issue of unemployment, especially among the youth population. 

Read on to find out more about the opportunities SEED Training of Trainers (ToTs) bring to business development service (BDS) providers in a highly challenging ecosystem environment., Joining a TOT allows actors to build networks and untap the potential of eco-inclusive enterprises in their communities.

The development of SMEs and eco-inclusive enterprises in Malawi can significantly improve the employment situation in the country. The current unemployment rate is 21% and is worse among the youth population (23%).  SMEs in the country employ 1.7 million people^[1], and with the development of more green and inclusive SMEs this number could increase. But, considering that 90% of SMEs fail in the first 10 years^[2], high-quality BDS Services are necessary to assure the sustainability of SMEs and the employment they create.  We spoke with Vinjeru Nyirenda, business consultant in UMODZI Consulting, who mentions that the development of eco-inclusive enterprises is slowly developing in an environment where the number of mainstream SMEs far outstrips the climate-smart and inclusive SMEs. Helped no doubt by them being recognised as an important contributor to the achievement of the SDGs^[3] and Malawi’s Growth and Development Strategy.

Vinjeru shares that climate change effects on the environment in Malawi have become more evident recently, for instance changes in weather patterns. Considering that the economy relies largely on the agricultural sector (more than 80% revenue from exports)^[4], the awareness on climate change and other environmental issues is thus increasing. But there is some way to go towards recognising eco-inclusive entrepreneurship as a vehicle for green and inclusive growth in Malawi^[5]. And although, there are many policies and funding schemes relevant for eco-inclusive enterprises; the positive results these policies could achieve are hindered by the lack of correct implementation, policy inconsistencies^[6].

Eco-inclusive enterprises face in particular difficulties in accessing finance to develop their businesses. Sometimes they are not sure how to approach finance institutions, and when they do  they are often too risky to finance and therefore can’t access commercial loans^[7]. Vinjeru mentions that the majority of BDS providers lack linkages with financial institutions, which makes it hard for them to connect enterprises and financial actors. Difficulties in linking research institutions (for different topics from technical developments to market research) with enterprises to further and aid them in their development also characterises the ecosystem in Malawi as perceived by Vinjeru.

Challenges beyond these were identified at SEED’s Malawi National Dialogue Forum held in October 2019. Here, participants identified access to BDS services, limited information for the entrepreneurs about them, and, on the other hand, the lack of expertise and specialisation with BDS providers.

So, what opportunities do SEED ToTs bring to the table?

1. Quality training with ample modules on finance

Helping early stage enterprises think about financing needs and strategies. The financial tools in the SEED toolkit help enterprises effectively recognise their financial needs and identify the financial institutions they can connect with to access funding. In addition, enterprises become empowered in these topics and thus, more confident in themselves, as witnessed by Ms. Nyirenda.

Furthermore, SEED events such as the Malawi National Dialogue Forum which bring together different actors, including financial institutions, enterprises and BDS providers; as well as upcoming activities on green Finance in Malawi, provide opportunities to help mobilise support for and access to funding for eco-inclusive enterprises. 

2. Developing a sustainable economy

 Strengthening the green economy and helping with major challenges such as youth and women’s unemployment through high quality capacity building.

SEED ToTs help to professionalise BDS Services by providing tools and blueprints but also an approach which is flexible and tailored to meet the needs of SMEs. By improving facilitation skills, BDS advisors develop skills in the enterprises, strengthening the SME proposition to youth and women.

This means that with adequate support in capacity building, enterprises increase their ability to create new jobs^[8] for youth and women and contribute to the creation of green jobs more generally.

3. Creating impact in local communities

Through ToTs, BDS providers can change their focus, from more traditional corporate business training, towards focusing on impacting local communities. They can untap the potential of eco-inclusive enterprises, showcasing the impact they can create. This leads to searching and engaging with new and different actors to achieve that goal.

Owing to this new perspective, BDS advisors can engage in more interactive methods, and with more participants, not only eco-inclusive enterprises but also mainstream SMEs. SEED ToTs provide the opportunity for BDS providers to develop these skills and improve the quality of their capacity building services alongside.

^[1] SEED (2019): Reaping the Potential of Entrepreneurship for a Climate-Smart  Inclusive  Green  Economy  in  Malawi: Policy. Pathways for Eco-Inclusive Enterprises.

^[2] Byson Majanga (2015). An Analysis of Bottlenecks to SME Growth in Developing Countries: A Case of Malawi

^[3] SEED (2019): Reaping the Potential of Entrepreneurship for a Climate-Smart  Inclusive  Green  Economy  in  Malawi: Policy. Pathways for Eco-Inclusive Enterprises.

^[4] Ibid.

^[5] Ibid

^[6] Ibid

^[7] Ibid

^[8] Ibid