Smme in Botswana
LITERATURE REVIEW
THE SMME SECTOR IN BOTSWANA
2.1 INTRODUCTION
In its effort to diversify the economy away from dependency on the mineral sector, the government of Botswana realised the importance of supporting SMMEs in fostering economic growth and creating jobs. Over the past two decades, targeted financial support as well as advisory programmes to help the people of Botswana to establish their own enterprises was introduced and implemented at different levels. In the initial stages, “the programmes were set up more in response to specific problems encountered than as the basis of a comprehensive and more focused government policy on SMMEs” (RB, 1999). However, in recent times the landscape has since changed with government and the private sector pulling resources together in a crusade to assist the local SMME sector. The purpose of this chapter is to provide an overview of the SMME sector by reviewing the initiatives undertaken by government. Such initiatives include policy formulation and the implementation of programmes intended to assist the SMME sector in Botswana.
2.2 SMME DEFINITION
A review of the literature on definitions and categorisation of SMMEs indicates that there is no single and standard definition for SMMEs. It is in this regard that the Government of Botswana accepted the criteria proposed by the SMME Task Force of 1998 in defining the three categories of enterprises, using annual turnover and the number of employees. A micro enterprise is defined as a business with the number of employees not exceeding six and a maximum annual turnover equal to or less than BWP 60,000.00. A small enterprise makes an annual turnover of between BWP 60, 000.00 and BWP 1.5 million and employs not more than 25 people. A medium enterprise is defined as a firm that has a maximum number of 250 employees and an annual turnover of between BWP 1.5 million and BWP 5 million (RB, 1999).
The SMME Policy (1999) notes that, even though the categorisation
THE SMME SECTOR IN BOTSWANA
2.1 INTRODUCTION
In its effort to diversify the economy away from dependency on the mineral sector, the government of Botswana realised the importance of supporting SMMEs in fostering economic growth and creating jobs. Over the past two decades, targeted financial support as well as advisory programmes to help the people of Botswana to establish their own enterprises was introduced and implemented at different levels. In the initial stages, “the programmes were set up more in response to specific problems encountered than as the basis of a comprehensive and more focused government policy on SMMEs” (RB, 1999). However, in recent times the landscape has since changed with government and the private sector pulling resources together in a crusade to assist the local SMME sector. The purpose of this chapter is to provide an overview of the SMME sector by reviewing the initiatives undertaken by government. Such initiatives include policy formulation and the implementation of programmes intended to assist the SMME sector in Botswana.
2.2 SMME DEFINITION
A review of the literature on definitions and categorisation of SMMEs indicates that there is no single and standard definition for SMMEs. It is in this regard that the Government of Botswana accepted the criteria proposed by the SMME Task Force of 1998 in defining the three categories of enterprises, using annual turnover and the number of employees. A micro enterprise is defined as a business with the number of employees not exceeding six and a maximum annual turnover equal to or less than BWP 60,000.00. A small enterprise makes an annual turnover of between BWP 60, 000.00 and BWP 1.5 million and employs not more than 25 people. A medium enterprise is defined as a firm that has a maximum number of 250 employees and an annual turnover of between BWP 1.5 million and BWP 5 million (RB, 1999).
The SMME Policy (1999) notes that, even though the categorisation