Business Perspective: Why smes need to be supported

Discussing business with my friend early during the week, I was complaining about the banks not giving small business owners money so that they too can float in the business world. It seems to me money goes to where money is. Unless you have a car or a house as collateral then forget about applying for a loan; that is what was told to me two weeks ago to my face in a few banks that I had visited. I have been very frustrated and still am. I have managed to secure my small company a small contract to supply some things, but I can’t get money to undertake the contract, how frustrating business life is! First we run around frustrated looking for business, and when we manage to get a small contract, we become even more frustrated in getting the money to supply, as I am writing this article two friends have already closed their businesses because of lack of financial back up. Small business owners deposit money in banks on every day basis, however small the amount, but they cannot easily access money to re-invest into their businesses. However, people with salaries can easily get loans to help them have their dream weddings or buy themselves lavish cars, but a small business owner who wants to buy a machine which will bring in money in return is refused such a service. It is an open secret that The Micro, Small, and Medium Enterprises generally are the main source of economic growth in many countries, but they are still facing some challenges that are resisting their growth in business. . As the process of globalization is gaining momentum, SMEs are struggling hard to survive and stay for long term in the competition. The major issues with SMEs are low investment, low access to technology, lack of product innovation, and inadequate marketing support in an increasingly competitive environment, lack of management skills, meagre adaptability to new market trends, lack of technically trained people are some of the reasons that are blocking their growth, which all trickles down to financial freedom. Even though SMEs are struggling to market their products in the open economy, they can only do so much because it all goes back to finances, only a few of them are able to market themselves in the international market and most of them who are able to, are ineffective for the obvious reasons. In today’s competitive global market, there is a need of good valued, knowledge-based products as well as production rather than less valued, price oriented way of businesses, this can be a hurdle to SME’s because of lack of capital in their businesses. The world economic crunch is biting in every corner of the world, but in my opinion something ought to be done. Now with the prices of fuel going up because of the political unrest in the Arab world I am wondering whether we will be able to sustain our businesses, and for how long will they continue paying salaries to their employees who have become unproductive? Many business owners will go home having failed to sustain their businesses not because they do not have the technical know-how, but because they do not have the financial back up of technical know who. Ends