Company
LOGO
AFRICA CONGRESS OF ACCOUNTANTS
PAFA event - GHANA – MAY 2013
Promoting the Growth of Small &
Medium Enterprises (SME)
Tshego Modise, President, BICA
Agenda
1. What is SME
2. Need to Promote SME's
3. Botswana SME's
4. Key Message to Stakeholders
What is SME
• What exactly an Small to Medium Enterprise is depends on who’s doing the defining
• Various economies have a different definition
which varies
• Whatever be the definition – SME's play a
crucial role in achieving industrial and economic
development objectives of an economy
What is SME – continued...
• IASB defines SME's based on accountability and not on
monetary limits (IFRS for SMEs applicability)
• European Union (EU) defines that there are three broad
parameters which define SMEs:
– micro-entities are companies with up to 10 employees
– Small companies employ up to 50 workers
– Medium-sized enterprises have up to 250 employees.
• "The category of micro, small and medium-sized
enterprises (SMEs) is made up of enterprises which employ
fewer than 250 persons and which have an annual turnover
not exceeding 50 million euro, and/or an annual balance
sheet total not exceeding 43 million euro."
Botswana's SME Thresholds
Employment
Annual
Turnover in
BWP
Annual
Turnover in
USD
MICRO
Less than 6
workers
Less than
P 60 000
Less than
$ 7 200
SMALL
Less than 25
workers
Between
P 60001 to 1.5
Million
Between
$ 7 200 to $
180 000
MEDIUM
Less than 100
workers
Between P 1.5
Million to P 5
Million
Between
$ 180 000 to
$ 600 000
Need to promote SME's
Large
Corporates
Government
/ NGO /
Parastatals
SME
Successful Economy
Challenges faced by SME's
Lack of
Finance
Scarce
Skills
Market
access
Technology
Gaps
Inadequate
Collaboration
Lack of
importance for
Branding &
Marketing
Regulation
support
Record
keeping
Financial
(Cash Flow)
Management
Challenges faced by SME's
Various
Industry
Challenges
Limited
Business
Acumen
High failure
rate of
SME's
Getting out of Comfort zone
Synergic effects of SME's
Skills
Transfer
Diversification
Employment
Creation
Botswana SME …
Some Botswana Initiatives to promote SME
Promoting SME's
Supporting
Training
Entrepreneurial
Skill
LEA
BOTA
Low Cost
Funding
LEA
CEDA
CEDA
Private Sector
BOTA
BOCCIM
Botswana initiatives – continued …
SMME subcommittee
• Public Sector committee
• Involvement with BOCCIM & Stakeholders
Micro GAAP
• For entities not required to comply with IFRS
• Simple framework for SMME & SME's
High Level Consultative Council
• Forum for constructive dialogue between business and
Government
• Doing Business committee to improve Botswana ratings
Botswana Initiatives - continued
• Political will
• Regulatory
support
Aggressive
leadership
Good
outcome
• Continuous
learning
• Delivering Set
objectives
• Ongoing
review
• Creative and
flowing ideas
Conducive
Environment
SMEs: key messages to government
• A thriving SME sector is key to economic growth and
job creation
• An enabling regulatory requirement is critical –
particularly SME registration and monitoring
• Governments can engage (incentives) to address the
need for start-up funds
• Governments play an essential role in capacity
building, e.g.
– Promoting the need for more entrepreneurs and
SMEs
– Setting up agencies for advice and training on
starting and operating SMEs
SMEs: key messages to business
• Localizing value creation through SME engagement is a
key contribution to economic development wherever
“big business” operates
• Leadership from the top is key to success - both
strategically and operationally
• Facilitating access to finance is critical
• Consider partnering across segments to facilitate SME
development and access to finance
• Business planning skills, incl. training in financial
management, are crucial
• Capacity building help is essential
Time is ticking…..
SME's need to overcome the hurdles
Acknowledgement
•
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Policy on Small Medium and Micro enterprises in Botswana – Government
Paper No 1 of 1999
Transforming Africa through embracing good governance principles – by
George B Partridge
The Role of Government in promoting investments to reduce poverty in Africa
– Ben Kaluwa
Botswana and sustainable development: Drawing policy strength from
experiences – Laurence Clarke 2008
Employment – creating through SME's in Sub Saharan Africa : Emerging
insights and challenges from Botswana – Thando D Gwebo
LEA Web site (www.lea.co.bw)
CEDA Web site (www.ceda.co.bw)
IFRS for SME's
Performance and Competitiveness of Small & Medium sized manufacturing
enterprises in Botswana
Promoting SME's for development - OECD