The Managing Director for Microfinance at BRAC-Liberia has stressed the need for stakeholders, especially government and non-governmental organizations (NGOs), to help empower Small and Medium Enterprises (SME) in the country.
Silent C. Gonondo, who spoke in Monrovia on November 6, 2019, at the launch of a study finding on operations of SMEs, described that sector of Liberian business as very critical to the economy of the country and, as such, there is a need for them to be adequately empowered.
Mr. Gonondo disclosed that SMEs constitute 96 percent of the country’s business entities, but had a drastic shock in 2014 as a result of the outbreak of the Ebola epidemic, which hit the country and its neighbors.
“As a result, many businesses closed or downsized during this period,” he said. Additionally, the number of loan missed-repayments by small enterprise microfinance borrowers increased among BRAC-Liberia microfinance customers.
However, Mr. Gonondo noted that if Liberia is to be resuscitated from the present economic crisis the least person doing business in the country needs to be empowered.
“Small and Medium Enterprise is the engine of development. Indeed, they need to be empowered,” Gonondo said. The launch of the findings was held under the theme, “Enhancing Small and Medium Firms Growth.”
The Deputy Finance Minister for Economic and Debt Management, Augustine J. Flomo, also reemphasized the importance of SMEs’ empowerment. He lauded BRAC for the level of work that it is doing in the country.
“Every economy that wants to be sustainable should prioritize their SMEs,” Minister Flomo asserted. He also stressed the need for capacity building for owners and employees, adding that it is the key to nation-building.
“For those small businesses, they need the necessary framework to help them survive. They create lots of jobs, and they are known to be the engine of any economic growth,” Minister Flomo said.
The minister also called on those involved with SMEs to take advantage of every opportunity that comes their way to improve on their businesses. “If you want to put out a challenge of supporting the economy, and you want to be recognized, you have to play your role. If you identify the area you want to work in, you have to do it with a commitment for your success rate to be good,” he said.
While presenting the finding from the study, BRAC-Liberia Country Representative Aisha Nansamba reiterated that the effect of the Ebola Virus Disease has caused a significant number of SMEs to decline.
She also noted that the lack of basic entrepreneurial training or inadequate business skills and knowledge are some critical challenges that have been identified in the SME sector of Liberia.
To enhance the SME sector, Madam Nansamba said there is a need for people to undergo training in customer service, business planning and access to finance, procurement, marketing, and accounting services.
The Partnership for Economic policy (PEP) research team designed a randomized control experiment to assess the effect of business management and interpersonal relations training on SME business performance and customers’ loyalty and satisfaction, the BRAC Country Representative added.
She revealed that random stratified samples were taken of 577 SME owners who are microfinance borrowers under BRAC Small Enterprise Program (SEP). The sample members were randomly assigned into three groups.
According to her, in-group one, firm owners have given business management skills training at a one-day workshop; firm owners attended a one-day workshop for interpersonal skills training as well as business management skills training and, lastly, there should be a baseline survey with the firm owners from all three groups.
The team also conducted a cross-sectional customer satisfaction survey. Rolling out the policy message, Madam Nansamba said the revenue increase for owners who received additional training on interpersonal relations indicates that taking a customer-central approach can be an effective way to improve business performance.
“These findings demonstrate the potential value of training to improve interpersonal relations and customer care. As such, this type of training should be included in entrepreneurial skills programs, aiming to enhance the performance of small businesses,” the BRAC Country Representative said.
She continued, “Policymakers should encourage the inclusion of soft skills training in the formulation and reformulation of the SME policy.”