1 sme-development, from the point of view of local authority and business community north-south...
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SME-development, from thepoint of view of local authority
and business communityNorth-South Conference, Mwanza
November 2009
ONDANGWA-LEMPÄÄLÄ-KEETMANSHOOP-KANGASALAPartnership For Local Democracy, Development And Social Innovation
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CHAPTER 1:
-Profile of SME-sector
in Ondangwa and Keetmamshoop, based on survey 2008
-National policy of LED-functions in a Local Authority
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JOB CREATION
Majority of enterprises have maximum 5 employees
It is important however to recognise the importance of job creation in smallest 1-3 person enterprises
18
8
28
12
19
19
0
9
36
17
16
22
0 10 20 30 40 50
Nobody
1
2 - 3
4 - 5
6 - 10
11 - 190
Amount of respondents, pcs
Keetmanshoop, n=104 Ondangwa, n=100
5. Number of employees
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BUSINESS SECTORS6
27
14
1
8
3
14
0
4
0
1
12
5
5
33
14
3
5
5
14
0
0
18
4
3
1
13
7
32
0
0 10 20 30 40 50
Wholesale
Retail
Hospitality
Transport
Telecommunication service
Other Service to business
Other Service to consumers
Education/training
Health/social work
Manufacturing
Building / Construction
Agriculture
Other
Metal / car repair / panelbeating
Electrical appl. repair, installation
Amount of respondents, pcs
Keetmanshoop, n=104 Ondangwa, n=102
6. Field of activities
Pcs Keetmanshoop OndangwaTextile, clothing, accessories 10 9Carpenter, furniture, home decoration 9 4Building materials 8 2Other manufacturing industry 5 3N 32 18
It is positive to recognise the number of manufacturing enterprises but there may not be need to emphasise any specific business activity in reference to the others
o It may be more important to focus on factors of job creation, local value addition, profitability and sustainability
o Promoting social innovation and public-private partnerships of services may contribute the economic growth significantly
Manufacturing enterprises:
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TURNOVER?7
18
3
23
6
13
10
1
9
22
16
26
7
10
4
1
0 20 40 60 80 100
10 000 or less
10 001 - 50 000
50 001 - 100 000
100 001 - 500 000
500 001 - 1Million
1 - 3 Million
3 - 20 Million
20 Million or more
Amount of respondents, pcs
Keetmanshoop, n=81 Ondangwa, n=95
Annual turnover (Missing estimated by monthly turnover * 12)
Average:o Keetmanshoop 1 785 452
o Ondangwa 1 373 843
o There were more manufacturing enterprises in Keetmanshoop and the enterprises are a bit older
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AVAILABILITY OF LABOUR
Need for employment office services should be considered
42
17
23
22
28
29
18
25
0 10 20 30 40 50
Very difficult
Rather difficult
Rather easy
Very easy
Amount of respondents, pcs
Keetmanshoop, n=104 Ondangwa, n=100
12. How difficult/ easy it is to find workforce
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START-UP CAPITAL63
6
0
27
2
3
75
14
1
12
2
14
0 20 40 60 80 100
By savings
Withfamily's/friends
help
Loan fromfriends/neighbours
Loan from bank
Grant/loan ofdevelopment
institution
Other
Amount of respondents, pcs
Keetmanshoop, n=92 Ondangwa, n=102
18. How did you raise your start-up capital
Financial services for smaller enterprises clearly need development
o Lack of collaterals may be the main issue!
o Business plans and innovations as collateral could be considered as a modern instrument
18. 2. otherFreq.
Family loan 1Finnish Financial Institution 1From another business 1Husband's help 1Inherited. 2Loan from NDC 1Loan from a supplier 1
Loan from the members/stakeholders 1Overdraft from the bank. 1Owners contributions 1Sold thier old business 1Some capital come from salary 1Started selling few clothes 1Steiner Group 1Used the pension money. 1With help of a supporting project. 1Total 17
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EASY ACCESS TO CAPITAL?
High interest rates may be affecting growth of business
Lack of collaterals make it difficult to raise capital
21
26
12
45
1
25
37
37
0 20 40 60 80 100
Very easy
Rather easy
Rather difficult
Very difficult
Amount of respondents, pcs
Keetmanshoop, n=104 Ondangwa, n=100
19. How easy is the access to capital nowadays
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MAIN PROBLEMS OF ENTERPRISES
0
5
10
15
20
25
30
35
40
HR/STAFF DEMAND FINANCE SECURITY/THEFT PREMISES ELECTR/WATER MATERIAL TRANSPORT DEBTS
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INFLUENCE OF LOCAL AUTHORITY
Majority of enterprises feel that Local Authority should have more influence / cooperation / interaction with the enterprises!
4
33
67
10
40
52
0 20 40 60 80 100
Too much
Enough
Too little
Amount of respondents, pcs
Keetmanshoop, n=104 Ondangwa, n=102
22. How much does Local Authority influence your enterprise
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HOW SHOULD LOCAL AUTHORITY SUPPORT SME’S?36
36
30
47
39
12
14
28
23
28
43
39
44
19
0 20 40 60 80 100
Support for start up enterprises
Advisory support
Advisory assistance on finance
Consultancy on town planning andpremises
Investments on premises forbusiness
Training
Other
Amount of respondents, pcsKeetmanshoop, n=85 Ondangwa, n=98
23. What kind of support would you prefer to have from Local Authority
Keetmanshoop;o Town planning, infrastructure, start-up
support, advisory support
Ondangwa; o Training, Town planning and infrastructure,
start-up and other advisory support
Microsoft Excel -taulukko
What k ind of training Keetmanshoop OndangwaBusiness management 3 21Accounting and finance 4 6Marketing, customer management 1 11Staff training, vocational training 5 6Legislation, regulations 0 4IT 1 5Other 0 4Total 14 57N 13 44
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MINISTRY OF LOCAL GOVERNMENT WHITE PAPER ON SME-SUPPORT= Basic LED-functions of a Local Authority
OPEN MARKETS SHOPPING CENTRES AND MALLS SMALL BUSINESS INFORMATION UNITS (WITH NCCI, JCC, ODC) PARTNERSHIPS; Industrial parks, business service providers,
Vocational Training Centres COOPERATE WITH COMMERCIAL BANKS ENCOURAGE ACQUIRING FREEHOLD TITLES FOR COLLATERALS REVIEW REGULATORY ENVIRONMENT FOR BUSINESS ATTRACT VISITORS AND TOURISTS ATTRACT INVESTMENTS LAND USAGE FROM THE POINT OF VIEW OF BUSINESS ENVIRONMENTAL PROTECTION FROM THE POINT OF VIEW OF
BUSINESS, MANUFACTURING ETC… IDENTIFICATION OF MARKETS COMPARATIVE ADVANTAGES
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ENABLING ENVIRONMENT
LED officer, in cooperation with CEO shall promote cooperation between the Town Council and the business community and he/she shall:
o Establish/Create of LED advisory committee• The committee shall discuss eg:
– Comments land allocation issues from the business point of view
– Local Economic development/growth strategy
– Any problems on any sector, between business community and Local Authority
– Any other upcoming LED-related issue
o Develop and implement a Local Economic Development Strategyo Advise Council on issues that affect LEDo Promote and encourage a positive relationship with other stakeholders i.e.
MTI,NCCI, Regional Councilso Enhance capacity in the local physical infrastructure.
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RESEARCH AND DEVELOPMENT
Collecting, interpreting and analysing data that will influence future priorities and actions;
Undertake and analyse appropriate research to establish the needs and opportunities of local businesses and the local economy
Develop a strategy of finding resources for research and planningo Eg networking with other institutions
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SME-DEVELOPMENT
Encouraging and supporting SME development o Advise sme’so Facilitate / coordinate advising, training and mentorship of new and existing
sme’so Facilitate technical support
Facilitate SME business access to markets Develop and manage informal trading Creation and management of business information and innovation
centre
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FACILITATE FINANCE
Identifying business funding opportunities Securing external funding support to undertake local developments Monitoring the management of external funding for Local Economic
Development re-generation Lobby in commercial banks on behalf of the sme’s
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PROMOTION OF INVESTMENTS
Marketing and promotion of investment opportunitieso Web-site, brochures, get editorial material published
Develop and promote tourism opportunitieso Establish tourism information centre