John Dammert:
Chamber's Role in SMME Support & Development

• Introduction
• Role of SMEs in the National Economy
• Rationale for Servicing SMEs
• Services
• Problems of Chambers of Commerce

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Chamber's Role in SMME Support & Development
John Dammert

Introduction

In industrial as well as in developing countries more than 95% of all enterprises are of small or medium-size. Small and medium-sized enterprises (SMEs) generate a large part of the national income and employment, disseminate technical know-how and new technologies and innovations, decentralise economic structures and improve efficient use of national resources.

In the past chambers of commerce and industry often neglected this sector by concentrating on larger firms which are able to pay higher membership fees. Many chambers, especially in developing countries, still have only few members consisting of large-scale enterprises, which in most cases grew because of biased favourable policies, for instance in the case of Namibia and South Africa. With such a structure of membership, chambers represent only a small portion of the business community.

Today, it is widely accepted that chambers of commerce and industry must try to attract new members more particularly from the SME sector and emerging businesses. With such a policy, chambers can increase their status, influence and income and achieve a higher recognition by the government and the general public.

Chambers of commerce operate differently in different countries. For instance, in Germany, France, Spain and Egypt, they have public law status with compulsory membership. In other countries, like the UK,

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USA, Ghana and Namibia, chambers have private law status with voluntary membership.

Role of SMEs in the National Economy

The historical experience of economic development in the developed countries is replete with success stories of the role of SMEs in industrial development, technological innovation and export promotion. Similar examples are indeed also found in developing economies of Africa, Asia, etc. The industrial revolution of 1760 to 1850 is a testimony of the innovative spirit of SMEs, which increasingly challenged in the present century and the century to come, particularly after winds of change and industrial liberalisation have swept various economies of the world.

Contrary to the general impression, SMEs are as much an important catalyst in industrialised countries as they are in the developing world.

Rationale for Servicing SMEs

There is hardly any country within the SADC region where special programmes have not been devised for SMEs. The range, variety and quality of services differ depending on governmental policies and government understanding of the needs of this sector.

Private sector institutions such as chambers of commerce and industry associations have to increasingly play a more effective and vital role in the formulation and implementation of programmes and policies for small business promotion than has been the case so far.

Qualitative shifting of strategies for the promotion of SMEs needs to be employed - from a regulated and bureaucratic approach of governmental agencies to a more pragmatic and pervasive involvement of chambers and non-governmental organisations (NGOs) which should imbibe an element of faster delivery systems. The government should play a facilitative role rather than being the implementor of its own policies and programmes.

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Chambers in many countries are already engaged in serving SMEs by providing training and business counselling, undertaking entrepreneurial development programmes and by setting up advisory and information services. They are also taking a leading role in protecting SMEs interests and in promoting their development and growth.

As all sizes of business enterprises or industries are members of chambers, they are best suited for encouraging linkages between large and small industries regarding production and supplies of parts and components for the assembling units and delivery of much needed service.

Services

It is a disappointing reality that many chambers of commerce have not been very effective in finding reasonable solutions to the impediments faced by SMEs.

In broad, chambers of commerce can offer service to the SMEs in the areas of:

• Advocacy
• Advisory/Counselling
• Information Dissemination
• Database
• Management Training
• Marketing
• Finance, Budgeting and Accounting
• Quality Management
• Trade Fairs and Exhibitions
• Training on Trade Promotion, etc.

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Problems of Chambers of Commerce

It is worthwhile to look at some main weaknesses of chambers of commerce, especially in the developing countries:

• Low membership of SMEs

• Poor leadership and shortage of skilled staff

• Inadequate finance

• Non-acceptance as full partners by government

• Organisational instability and inefficient administration

It is desirable to remember that small business promotion and the strength of the organization are two sides of the same coin. For the chambers to be more effective in service delivery to SMEs, they need to employ skilled and motivated staff, with adequate representation from the small business community.