Hamid Jhumka:
Promotion of SMEs: The Experience of the Mauritius Chamber of Commerce & Industry

• Introduction
• M.C.C.I. Support
• Special Attention to SMEs
  • 1. The Mauritius Young Entrepreneur Trust
  • 2. Training
  • 3. Legal Services
  • 4. Antenna for CDI and PRIDE
  • 5. EPZDA, SMIDO, NHC, MSB

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Promotion of SMEs: The Experience of the Mauritius Chamber of Commerce & Industry
Hamid Jhumka

Introduction

Mauritius has a relatively long history of a liberal economy. The private sector is very well developed and Government direct intervention in business has traditionally been quite limited. In general, businessmen do not depend on Government institutions to develop their business, and their desire to create an enterprise would be strong enough to incite them to find out the information, procedures, assistance, and other conditions necessary for the realisation of their project.

This attitude constitutes a very important factor in the development of SMEs in Mauritius. It stems perhaps from a combination of the necessity and the desire to lead a decent life, a strong individualism, and a natural tendency to have one’s own enterprise instead of working for someone else.

Furthermore, the natural inclination to develop a business has been encouraged by the existence of relatively simple legislation and procedures. In many cases, there are not even any regulations. In fact, until a few years ago, it was still possible to carry out certain business activities without any permit. Even in cases where regulations did exist, they were not very rigid or exacting. Thus the standards concerning health and safety are generally quite low and very often

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they are not enforced. This extremely liberal situation has helped SMEs to develop very easily.

M.C.C.I. Support

The usual opposition between SMEs and large enterprises has not really been a relevant factor in the outlook of the M.C.C.I., which is a private and voluntary institution. In discharging its duties, the Chamber does not make any difference between small and large enterprises. As a general rule, its services are meant for everybody, whether one of its members or not. More precisely, the Chamber offers a wide range of services to promote business in general which are available first and foremost to its members but which are extended to non-members as well. The services include: Advisory and Consultancy Services; Training; Promotional Activities; Information Services; Legal Services; etc. Through its traditional and fundamental mission of making representations to various agencies, the Chamber also acts in favour of the small sector. M.C.C.I. expresses the views of the business community, submits suggestions and when appropriate raises objections, not forgetting the peculiarities of the small sector if necessary. It is clear that the activities of the Chamber, as far as representation is concerned, have a direct bearing on the small sector. It is not wrong to say that the interests of the small sector are taken into consideration whenever the Chamber holds discussion with Government representatives.

M.C.C.I. provides information and advice freely on trade, industry, agriculture and other sectors, not only to its members but also in fact to anybody. Small entrepreneurs benefit much from these services which cover, inter alia:

The economic situation in Mauritius and in the region, trade regulations, development incentives, procedures to start a business, import and export procedures, addresses of firms and institutions in Mauritius and other countries, shipping documentation, trade disputes, customs duties, etc.

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The Chamber runs Documentation Services where trade directories, magazines, legislation, wage regulations as well as various documentations on the economy and specific sectors can be consulted freely.

Though the Chamber strives, in the execution of its tasks, for the whole business community and ultimately for the economic development of the country, it is a fact that it is perceived by the public as being an association of large firms and that its services are not intended for small enterprises. This perception may explain why many small firms shy away from applying for membership or simply asking for information and advice. A second reason for small firms to shun the M.C.C.I. is probably the fact that a small business is usually totally managed full time only by the owner himself. In such cases, the entrepreneur cannot spare any time to come to the Chamber.

It is probably correct to suppose that the main reason for a firm to join the M.C.C.I. is the belief in the necessity to have a strong and widely representative association to defend the interest of the business community. However, there are many people who think essentially in terms of concrete services that they can obtain in return to the membership fees. In general, these people would never join the institutions, or if they do it would be for a limited period. Experience has shown in fact, that it is not the level of the membership fees, which is a deterrent to the adherence of many firms to the Chamber. In fact it includes in its membership lists SMEs as well as large enterprises. On the other hand, there are many big firms, which are not members of the Chamber.

Special Attention to SMEs

The limitations of the M.C.C.I. in terms of membership and direct impact of its services on SMEs constitute a regular issue for its board of directors. From time to time there is a reappraisal of the situation and an effort to introduce new services to respond to the needs of the

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economy. There is in fact a permanent search for appropriate solution to any problem of national concern, which is relevant to its missions. The following example highlights its active participation in the development of SMEs.

1. The Mauritius Young Entrepreneur Trust

The MYET has been created with the support of 10 private companies. Their objectives are:

1. To promote entrepreneurship among young Mauritians who are in need of financial assistance.

2. To give such young Mauritian entrepreneurs financial means, advise or training in order to assist them in creating and managing their own business.

In order to achieve these objectives, all sponsors have accepted to donate to the Trust a sum of Rs 150,000 - each over a period of three years. If this pilot project is successful, the Chamber intends to renew the fund by appealing to other local firms and international organisations.

Given the limited amount of capital, the Trust expects to finance two to three entrepreneurs annually for the first three years. But subsequently, it is believed that enough funds will be available to support a greater number of projects.

Concerning the loan itself, it varies according to the size of the project, with an interest rate of about 7%, repayable over a period of 6 years, with a moratorium depending on the possibility of the promoter. No guarantee is required. In addition to the loan, training can be provided if necessary.

Furthermore, one of the main characteristics of the Trust is that support is provided to the Young Entrepreneurs by Mentors who are business advisors working on a voluntary basis. They are usually

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successful entrepreneurs themselves with a long experience in business. They act as coaches and have a friendly approach.

2. Training

The M.C.C.I. became interested in training activities is 1985 when it was noted that there was a great demand for computer programmers and analysts. The Chamber first introduced a one-year course for student with Higher School Certificate. Three years later, in its endeavour to better respond to the demand of private firms, the Chamber introduced a two-year course leading to a diploma called the „Brevet de Technicien Supérieur en Informatique de Gestion".

Since 1994, the Chamber has been running a third course: the „Brevet de Technicien Supérieur - Assistant de Gestion PME-PMI". It is a two-year Diploma course designed especially to train assistants for the management of SMEs. In addition, the Chamber runs short courses on topics like International Trade, Import and Export Procedures, Word Processing, etc.

All these courses have been most useful in the creation and development of SMEs.

3. Legal Services

We can mention a legal service, which has been introduced at the M.C.C.I. last year, together with the creation of an arbitration court. We are now in fact discovering that small entrepreneurs have very little notion of legal aspects in business and that they urgently need advice. Our legal adviser has started to inform businessmen about their rights, the importance of signing a contract, and the advantages of choosing arbitrations in case of disputes.

There is no doubt that such type of advice is contributing positively to strengthen the position of SMEs.

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4. Antenna for CDI and PRIDE

As antenna for the Centre for the Development of Industry and the Programme for Regional Integration PRIDE, of the Indian Ocean Commission, the Chamber is very active in helping SMEs to obtain various types of assistance, like technical assistance, training, marketing, start-up, etc. Without such assistance, many SMEs would remain helpless and would not have been able to modernise and to grow.

5. EPZDA, SMIDO, NHC, MSB

The Chamber shows its support to SMEs through its participation at the Board of Directors of several parastatal bodies which promote the development of SMEs, namely EPZDA, SMIDO, NHC, MSB. The M.C.C.I. also works in collaboration with these institutions.

The above concrete cases illustrate the fact that M.C.C.I. is very sensitive to the conditions of SMEs, and that when it is within its capacity and scope of activities, it will introduce new services to support the development of SMEs. The Chamber aims at developing the economy through the consolidation of private business, and its services are adapted to prevailing conditions. Given the increasing complexity of business and the greater demand of SMEs for supporting services, it is therefore natural for M.C.C.I. to offer adequate assistance in line with its missions.