By Mona Alam Eldin
It is accepted worldwide that the development and growth of (SME’s) is able to turn the country’s economy to a stronger economy, considering that a thick layer of the middle class can go through and mobilize all resources of the country and this is actually a great tool to provide jobs for youths, reduce unemployment rates, improve income, increase gross domestic products and encourage exports.
Despite the importance of SMEs and its active role in the development of the economy, there are various challenges that often stand in the way of its progress due to the lack of technology, information, poor skill levels and the absence of hosting markets.
Furthermore, bureaucracy, financing difficulties, credit obstacles and long term procedures are also considered significant obstacles, which urges owners to turn to informal financing instead of the formal channels that require long and complicated procedures.
Egypt’s President Abd Al Fatth El Sisi announced that “2016” is the year of “The Egyptian Youths” and their active role in the development process through Micro, Small & Medium Enterprises. He announced the establishment of a new agency responsible for Micro, Small & Medium Enterprises, which will serve as a link between all needed divisions in order to establish success for SMEs.
It is to be noted that currently the government is directing all needed efforts towards facing various challenges and obstacles through:
* Government’s reforms by simplifying licensing procedures and adoption of micro finance laws.
* Banking Sector reforms by encouraging banks to lend SME’s, with lower interest rates and easier procedures .
* Donors support, as the World Bank, Canadian Aid and the European Union.
* Private Sector’s initiatives to promote the Micro, Small & Medium Enterprise’s eco system.
* Comprehensive packages of technical assistance, advisory services, trainings, evaluation and supporting policies and strategies are urgently needed; strong Human Resources departments are also needed in order to establish an excellent management and be able to achieve success.
