SME Sector: Major boost in 2016

Small and Medium Enterprises are considered as being an upcoming economic pillar. SMEs currently employ around 40% of the country’s workforce. On December 23, during a press conference, the Minister of Enterprise and Cooperative, Sunil Bholah announced various measures for 2016. As from January, the much awaited Maubank will be operational and it will introduce three dedicated schemes for SMEs through nine branches across the island and one branch in Rodrigues. The schemes are: Micro Enterprise Scheme, Creative Entrepreneurship Scheme, and Business Expansion and Sustainability Scheme. A total of Rs 10 billion will be made available over the next five years, starting with a share capital of Rs 200 million and a line of credit of Rs 2 billion from Government for Maubank’s first year of operation. In figures, during the year:

• 2,297 enterprises were registered, out of which 1,656 were start-ups.
• 1,267 benefited from counselling services and facilitation.
• 482 entrepreneurs have been trained in Entrepreneurship and Management Programs.
• 37 benefited from MBGS loan schemes for a total amount of Rs 27 million.

Another announcement made by the Minister was that entrepreneurs working in the blue economy, green economy, biotechnology and ICT will be exempted from tax for eight years. Moreover, the government has a master plan for the development of SME which aims at providing a boost for entrepreneurship. An expression of interest was launched recently and 29 proposals received. Some interesting measures announced are the construction of SME parks in Plaine Magnien, Petit Bois Caroline, Solitude and Vuillemin in 2016. Also, four other sites were identified at Chebel, Henrietta, Gokhoola and Beau Climat. The government’s vision of turning Mauritius into a ‘nation of entrepreneurs’ takes shape as from January, with measures announced so far becoming effective. To start with, the annual company licence fee of Rs 2,500 has been reduced to only Rs 500 for all companies with a turnover of up to Rs 10 million. This measure will benefit thousands of companies. Furthermore, SMEs registered with SMEDA and engaged in sectors such as biotechnology, ICT, ocean economy and green economy will be exempted from income tax for a period of 8 years. Small and medium enterprises contribute some 40% to the country’s GDP and employ over 280,000 people in some 108,000 establishments. A one-stop-shop, MyBiz, has been launched in Port Louis. This agency, managed by the SMEDA, houses several units, namely: General Business Development Services Unit; Licensing, Permits, Clearances and Registration Unit; Productivity Improvement, Certification, Capacity Building and Research and Development Unit and Incubator and Industrial Estates Facilities Unit. Afribrains Ltd, engaged in assisting start-ups, welcomes the move by the government to exempt SMEs from income tax. “However, in the last Budget Speech, it was announced that SMEs registered under the Scheme will be exempted from the payment of corporate tax for a period of 8 years, but now it seems only four sectors are concerned. Otherwise, the lowering of company licence fee to Rs 500 is a good move. Let’s hope the government also streamlines the Trade Fees, which, in many cases, are excessive and affects small enterprises. It would have helped SMEs if start-ups were exempted from paying Trade Fee during the first three years of operation. Trade categories should be further streamlined as SMEs often have to be engaged in more than one activity to survive, and diversification should be encouraged to strengthen SMEs, but this does not mean the enterprise should pay a multiple of trade fees. In the hotel sector, the government has rightly come up with an Omnibus Permit for various activities, thus saving paperwork and costs.” Nivedita Nathoo, a woman entrepreneur, told News on Sunday she is concerned about the Omnibus permit for the hotel industry. “Does this mean a hotel will be able to put up any activity it wants under this single permit? What about the impact of other businesses run within the hotel by external SMEs? What if there is unfair competition? So far, I haven’t been able to learn more on this issue but I hope the authorities have adequately measured its impact,” she said. Regarding the major boost given to SMEs, Nivedita Nathoo says she welcomes the government’s initiative, however, she hopes that small and medium enterprises are sustainable in the long term and that they have a market for their products. “If big players continue to capture large chunks of the market, then SMEs will suffer. We need to ensure more and more people become successful entrepreneurs, rather than become workers in sectors dominated by a few conglomerate. Minister Sunil Bholah seems determined to leave an imprint in the sector and he should be encouraged. The sector will definitely know a major boost,” she concludes.

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