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5.0 RESULTS AND DISCUSSIONS

5.1 Introduction

The survey of Mauritian SMEs was done with peculiar mention to the following 3 sectors:

  1. Leather and Garments
  2. Wood and Furniture
  3. Paper merchandises and Printing

Both face to confront interview and questionnaires were used to obtain the needed information. The informations collected were entered into SPSS 20 and the consequences were analysed utilizing the figures and tabular arraies obtained.

5.2 COMPANY DATA

( a ) Age of enterprisers

Figure 5.1: Age Group of Owner/Manager

It is upseting to observe that merely 5 % of the enterprisers surveyed were below 30 old ages and merely 32.5 % below 40 old ages. This is a affair of concern and indicates that non many immature people are prepared to take hazards in entrepreneurship and to cover with administrative fusss associated with the puting up of an endeavor. The trouble in holding entree to finance in the absence or deficient collateral at a immature age may besides be a cause.

During treatments, a few of them have indicated that their kids, after holding pursued higher instruction, have stayed abroad and are non interested in taking over the concern although the parents have succeeded in the endeavor.

( B ) Years in operation

Figure 5.2: No. of old ages company is in operation

Merely 10 % of endeavors have been established within the last three old ages whereas 65 % have more than 15 old ages. This is instead worrying. A partial account may shack in the fact that some of the new endeavors are in the infant phase and are still micro endeavors. With equal support, many of them will turn. In Mauritius and elsewhere in the universe, there are cases where micro endeavors have grown into big and even really big endeavors.

( degree Celsius ) Family members working in the endeavor

Figure 5.3: Family members working for the company

28 SMEs i.e 70 % have household members working in the endeavor either full clip, portion clip or during peak periods merely. Of these, 19 SMEs have household members working full clip, 3 SMEs holding household members working portion clip and 6 SMEs holding household members working during extremum periods merely. The 6 SMEs holding household members working during extremum periods merely are likely non paid or paid below market rate. This suggests that they have recourse to bootstrapping finance at times.

5.3 Selling

( a ) Budget for selling

Figure 5.4: Budget for Marketing

Selling is an expensive activity. 42.5 % of SMEs do non supply a budget for selling. Often, they are good established in the vicinity where they operate and do non seek to enlarge their market. They do non hold a clear vision of their concern in the medium and long term and perchance miss aspiration excessively. The chance for growing is greatly reduced in the absence of selling. Owing to the size of the endeavor and the limited fiscal resources, 23.5 % of them find marketing excessively expensive and 58.8 % does selling by word of oral cavity merely.

( B ) Marketing/Promotional tools

57.5 % of the SMEs have a selling budget. Of these,43.4 % participates extensively or reasonably in regional or international trade carnivals. The Government refund strategy per SME to the melody of Rs 200 000 per annum for engagement has been an encouraging factor.

Table 5.1: An indicant about how the marketing/promotional tools are used.

Extensively

%

Reasonably

%

Irregularly

%

Very small

%

Not at all

%

  1. Local advertisement ( Television, wireless, newspapers, hoardings, cusps etc )

4.3

39.1

30.4

4.3

21.7

  1. Local trade carnivals

26.1

34.8

13.0

4.3

21.7

  1. Regional or International Trade carnivals

21.7

21.7

8.7

13.0

34.8

  1. Professional Marketing Servicess

8.7

13.0

8.7

13.0

56.5

  1. Personal Selling/Direct Selling

60.9

21.7

4.3

0

13.0

  1. Web Page/ Email/ Facebook/Twitter/ Sms etc.

34.8

8.7

17.4

4.3

34.8

( degree Celsius ) Consequence of marketing budget on degree of gross revenues

21 SMEs answered this inquiry. Of these, 15 respondents considered the selling budget have a moderate consequence and 6 respondents as holding a high consequence on degree of gross revenues.

( vitamin D ) Product construct v/s Conventional Selling

Merchandise construct: The merchandise is developed foremost and so the house searches for market.

Conventional selling: The customers’ demands and penchants are identified first and the merchandise is developed consequently.

Figure 5.5: Concept following for selling

8.7 % of SMEs surveyed adopt the merchandise construct compared to 34.8 % following the conventional selling and 56.5 % utilizing both of them. It is promoting to observe that 91.3 % adopt the conventional selling for at least portion of their production. This is declarative of the consciousness of enterprisers on the necessity to continually introduce and to fulfill the demands and gustatory sensations of clients and to follow the market tendency.

  1. Finance
  1. Finance to get down concern

41 % of SMEs surveyed reported that they started their concern with either their personal nest eggs or their personal nest eggs plus aid from friends and relations. It is declarative of a strong equity base and hazard takers who do non waver to venture into endeavors with their ain financess.

Figure 5.6: The beginning of finance of surveyed SMEs

  1. Awareness of loans offered at concessionary rate

Table 5.2: Awareness of loans offered at concessionary rate

Sector runing * Awareness of loans offered at concessionary rates by Government bureaus Crosstabulation

% of Entire

Awareness of loans offered at concessionary rates by Government bureaus

Entire

Not informed at all

Not good informed

So/So

Reasonably informed

Well informed

Sector runing

Leather and Garments

5.0 %

2.5 %

10.0 %

12.5 %

12.5 %

42.5 %

Wood and Furniture

2.5 %

2.5 %

10.0 %

7.5 %

7.5 %

30.0 %

Paper merchandises and printing

2.5 %

2.5 %

12.5 %

10.0 %

27.5 %

Entire

7.5 %

7.5 %

22.5 %

32.5 %

30.0 %

100.0 %

Table 5.2 indicates the grade of consciousness of loans offered at concessionary rates. It is noted that merely 62.5 % of SMEs surveyed stated that they are either reasonably informed or good informed. The activities of Government bureaus should be further advertised through the media and through negotiations in assorted vicinities. Their services should be made known to enterprisers and possible enterprisers.

  1. Access to Finance

Table 5.3: Entree to Finance

Sector runing * Rate entree to finance for SMEs Crosstabulation

% of Entire

Rate entree to finance for SMEs

Entire

Easy

Reasonable

So/So

Difficult

Very hard

Sector runing

Leather and Garments

2.6 %

15.4 %

2.6 %

20.5 %

41.0 %

Wood and Furniture

10.3 %

10.3 %

10.3 %

30.8 %

Paper merchandises and printing

5.1 %

5.1 %

5.1 %

10.3 %

2.6 %

28.2 %

Entire

7.7 %

30.8 %

17.9 %

41.0 %

2.6 %

100.0 %

It is slightly distressing to observe that 41 % of SMEs surveyed see entree to finance as hard.

The Leather and Garments sector is peculiarly affected and it is declarative that the fiscal establishments are instead pessimistic about the concern chances in this sector.

  1. Loans from Commercial Banks

Figure 5.7: Main obstruction for obtaining loans from Commercial Banks

About half of them considered the high involvement rate as the chief obstruction. Since commercial Bankss are really cautious in progressing loans to SMEs, Government has set up in the 2014 budget a strategy whereby it will vouch loans to SMEs straight to commercial Bankss up to 70 % of any sum of loss incurred. This will be of aid to them.

  1. Different loan strategies offered by DBM Ltd

Figure 5.8: Different loan strategies offered by DBM Ltd

Figure 5.8 indicates that 68.8 % consider the different loan strategies offered by DBM Ltd as either satisfactory or really good.

  1. Time required for blessing of loan by DBM Ltd

Figure 5.9: Time required for blessing of loan by DBM Ltd.

It is straitening to observe that 76.6 % of SMEs surveyed see the clip required for expense of loans from DBM Ltd to be long or really long. This is a major hurdle to enterprisers and would be enterprisers.

SMEs may meet a impermanent job with hard currency flow/working capital and may necessitate financing instead rapidly.

On the other manus, most would be entrepreneur can non afford to wait long and at the terminal may put aside their undertakings.

  1. Cost of finance for SMEs

Figure 5.10: Cost of finance for SMEs

44.4 % of SMEs see the cost of finance as sensible, 36.1 % as expensive and 16.7 % as really expensive.

  1. Renting as an alternate beginning of finance

Table 5.4: Leasing as an alternate beginning of finance

Sector runing * Are you prepared to see renting as an alternate beginning of funding? Crosstabulation

% of Entire

Are you prepared to see renting as an alternate beginning of funding?

Entire

No

Yes

Sector runing

Leather and Garments

22.5 %

20.0 %

42.5 %

Wood and Furniture

7.5 %

22.5 %

30.0 %

Paper merchandises and printing

17.5 %

10.0 %

27.5 %

Entire

47.5 %

52.5 %

100.0 %

52.5 % are prepared to see leasing, peculiarly in the wood and furniture sector.

  1. Summary of fiscal jobs encountered by SMEs

Although 62.5 % are reasonably or good informed about loans at concessionary rates by Government bureaus, merely 17.9 % turns towards DBM Ltd compared to 38.4 % for Commercial Bankss, although the latters charge higher involvement rates. SMEs view the bureaucratic processs at DBM Ltd as burdensome and the long clip for expense of loans as discouraging. On the other manus, commercial Bankss view SMEs as higher hazard clients and demand comparatively high collateral. Consequently, 43.6 % of SMEs surveyed see entree to finance to be hard or really hard.

5.5 IT, TECHNOLOGY INNOVATION AND QUALITY IMPROVEMENT

( a ) Production procedure

Figure 5.11: Production procedure of SMEs

The survey reveals that merely 12.5 % of SMEs are utilizing high tech and computerised equipment in their production procedure. The usage of disused machines with inefficient engineering affects productiveness, merchandise quality and end product.

Although 90 % of the SMEs surveyed are cognizant of the advantages of IT and engineering invention, merely 62 % are taking advantage of them. As for the remainder, investing in equipment is considered excessively expensive and deficiency of cognition in utilizing IT is an hindrance.

( B ) Investing in IT or engineering betterment as a per centum of entire assets

Figure 5.12: Investing in IT or engineering betterment as a per centum of entire assets for the past 5 old ages.

( degree Celsius ) Foreign proficient advice or consultancy

41 % of the SMEs benefitted from foreign proficient advice or consultancy during the past 5 old ages. Of these more than three quarters was the consequence of their personal enterprise.

( vitamin D ) Technical advice or proficient aid from local support establishments

36.4 % of SMEs benefitted from proficient advice or proficient aid in engineering betterment from local support establishments during the past 5 old ages.

( vitamin E ) E-commerce and web site

36 % uses e-commerce and 54.5 % have a web site for their concern.

To advance the visibleness of SMEs and to assist in the selling and export activities, Government has announced that it will supply a free basic web site for all SMEs.

5.6 COMPETITIVENESS AND EXPORT

  1. Nature of market

Figure 5.13: Nature of market

The study shows that most of the merchandise every bit destined to the domestic market as shown in Figure 5.13.

Some SMEs do export from clip to clip, chiefly to the part but non on a regular footing.

  1. Troubles encountered in the export market.

Figure 5.14: Troubles encountered in the export market

Merely 18 respondents answered this open-ended inquiry and the 6 grounds given are presented in Figure 5.14.

Logisticss hurdlings were the most often mentioned followed by uncompetitive monetary values on the export market.

The hazard of default in payment is besides an of import factor that SMEs take into consideration in position of their comparatively modest fiscal resources.

A figure of SMEs are non interested in export activities. The figure is declarative of the instead low fight of Mauritanian merchandises as a consequence of expensiveness of imported natural stuffs compounded with high transit costs and likely with comparatively higher rewards.

Some SMEs have stated that even in the SADC and COMESA market, the advantage of the comparative propinquity is nullified by the high charges claimed by the cargo forwarders and transporting lines and the higher cost associated with modest volumes of exports.

  1. Competition

Figure 5.15: Competition

SMEs position imported goods as the strongest rival in the domestic market as shown in Figure 5.15. Trade liberalization and the lowering of duties as per WTO ordinances have benefited large foreign manufacturers with economic systems of graduated table. Lowering of transit and communicating costs in general have besides been good to them.

One SME in the wood and furniture sector mentioned that foreign companies established in Mauritius fabrication furniture to mensurate as its strongest rival. The preliminary plants and measurings are done by the local subordinate, the production done abroad and later installing done by the local subordinate. The major drawback is the clip taken to finish the work.

  1. Foreign spouse

Table 5.5: Working with a foreign spouse

( a ) Are you already working with a foreign spouse?

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

No

38

95.0

95.0

95.0

Yes

2

5.0

5.0

100.0

Entire

40

100.0

100.0

Table 5.6: Considering to fall in with a foreign spouse

( B ) Are you sing to fall in with a foreign spouse?

Frequency

Percentage

Valid Percentage

Accumulative Percentage

Valid

No

32

80.0

80.0

80.0

Yes

8

20.0

20.0

100.0

Entire

40

100.0

100.0

Tables 5.5 and 5.6 are self-explanatory.

However, during treatments, it is noted that SMEs are cognizant of the advantages of such venture in footings of equity engagement, entree to new markets and acquisition of advanced engineering.

A figure of them do non wish to fall in with a foreign spouse because they are satisfied with the current state of affairs, want to retain their independency or are excessively old.

  1. Clustering

Table 5.7: Bunch

Sector runing * Do you favor the construct of constellating? Crosstabulation

% of Entire

Make you favor the construct of constellating?

Entire

No

Yes

Sector runing

Leather and Garments

17.9 %

25.6 %

43.6 %

Wood and Furniture

17.9 %

12.8 %

30.8 %

Paper merchandises and printing

15.4 %

10.3 %

25.6 %

Entire

51.3 %

48.7 %

100.0 %

Table 5.7 shows that 48.7 % favour the construct of constellating. The higher per centum in favor comes from the leather and garments sector.

From treatments, it is felt that there is a deficiency of trust among Mauritanian SMEs. Some fear that the other SME may go a possible rival if they get a better thought of:

  • Their production procedure
  • Their volume of production
  • Their markets
  • And do familiarity with their work force.

While admiting that constellating can be good to SMEs, they believe that it will take old ages before Mauritians will set this construct into pattern.

However, one of the respondents is already engaged in “International Clustering” whereby the natural stuffs and semi-finished merchandise is from a foreign state and the remainder is completed in Mauritius.

  1. Sub-contracting

Figure 5.16: Sub-contracting

Merely 25 % of SMEs benefit sub-contracting plants from big Mauritanian houses.

This is unfortunate as SMEs normally have lower operating expenses. They have a greater flexibleness, can specialize in some types of production and be utile in extremum periods to assist big companies to run into tight deadlines.

To promote big concerns to stand in contract work to SMEs, the Ministry of Business, Enterprise and Cooperatives will come frontward with a National Inclusive Business Award to honor and acknowledge attempts made by big endeavors in this way.

  1. Export potency

Figure 5.17: Export potency

Whereas some of the SMEs have learnt about export potency through their concern contacts and some through SMEDA, most of them turn to Enterprise Mauritius as shown in Figure 5.17.

Although EM caters for both SMEs and big endeavors, the perceptual experience is that EM is more focussed on bigger volumes of export from big companies. Since the volumes of export from SMEs are limited, EM had recourse to groupage of lading from different SMEs for export.

  1. Achieving ISO/Various National Standards

Figure 5.18: Achieving ISO/National Standards

Merely 15.4 % of SMEs did have aid from national support establishments to better their merchandise quality. The Mauritius Standards Bureau merely tests the conformance to specific criterions.

5.7 MISCELLANEOUS

  1. Industrial infinite

Figure 5.19: Renting industrial infinite

Merely 10 % of SMEs surveyed are leasing industrial infinite from Government bureaus. One-half of them find the rental rate expensive. Some even find that private industrial infinites are cheaper.

To turn to this issue, Government will allow a rent subsidy of 50 % on new industrial units for the first three old ages.

  1. Time to get down operations

Figure 5.20: Time to get down operations

Merely 42.5 % see the clip to get down operation as sensible. It is declarative of the bureaucratic processs and administrative hurdlings encountered by SMEs before puting up a concern. There is a demand to simplify and streamline all the processs so as non to deter the possible enterprisers.

  1. Additional service

Figure 5.21

Merely 15 SMEs answered this open-ended inquiry. Of these, more than half would wish to hold extra support in the export market as shown in Figure 5.21.

  1. Business chances for the following 3 old ages

Figure 5.22: Business chances for the following 3 old ages

This inquiry has been answered by all participants. The figure speaks by itself and reflects the temper of the SMEs at the present clip.

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