Introduction In this assignment am going to talk about SMMEs and state why they are better than large

organisations when it comes to contribution to GDP, job creation and fighting poverty. Am also going to talk about the SMMEs constraints and interventions in Namibia.

What SMMEs stands for: Small and medium-micro enterprises

QUESTION 1 The importance of small medium and micro enterprises With the help of government support - is capable of fulfilling these objectives and has introduced a number of supply-side measures to promote the formerly neglected sector. SMMEs face to promote (faster) growth enhancing their capacity to comply with the challenges of globalisation and an internationally competitive economy.

Firstly, SMMEs as enterprises have some economic roles to fulfil. They contribute to a countrys national product by either manufacturing goods of value, or through the rovision of services to both consumers and/or other enterprises. This encompasses the provision of products, and to a lesser extent, services to foreign clients, thereby contributing to overall export performance. SMME Contribution to GDP As mentioned before, discussing SMME contribution to the GDP is problematic, since the GDP typically records only formal activities, while most SMMEs are active in the informal sector. Therefore, in theory, two approaches are possible: either ignoring the informal sector entirely, which can only give a partial answer to the question of the economic significance of SMMEs; or attempting to quantify the value added generated by informal enterprises. SMME Contribution to Employment Several technical difficulties arise when comparing the figures below. The definitions of employed may vary, depending on whether or not they include domestic workers, public sector employment and self-employed. The largest disturbing factor, though, is the estimation of the informal sector.

Question 2
Constraints of SMMEs in Namibia SMMEs are moreover expected to respond flexibly and thus withstand global competition. SMMEs operate in conditions of excess supply of relatively unskilled and unorganised labour. SMMEs in Africa face crises of legitimacy and enforcement by not being rooted in local culture and are therefore far from conducive to enterprise growth. No access to finance and information.

Governments of Namibia Interventions

1. Access to information Access to information is important both from the SMEs perspective and from the perspective of the providers of financial services. The SME requires information with which to identify the potential suppliers of the financial services. 2. Expansion in the range of institutions providing finance to the SME sectors International observers consistently conclude that the greater the number of entities that find lending to SMEs profitable and the higher the level of competition in conventional banking services, the greater the likelihood of increasing the supply of finance to SMEs. 3. Access to capital for non-bank financial intermediaries (NBFIs) Limitations on access to capital are a substantial obstacle to the growth on non-bank financial institutions (including micro-lenders), which in turn limits such institutions ability to provide finance to SMEs. The profile of capital to which non-bank financial institutions have access legally, prevents these institutions from structuring optimum asset/liability structures. As a result the originating of assets of the size and term structure required for SME financing becomes very difficult for NBFIs.

4. Debt-oriented public policy interventions

The Task Group took cognisance of a range of debt-oriented public policy interventions in the UK and other countries. Although it may be worthwhile to revise this does not appear to be the highest priority.

Conclusion SMME sector is expected to fulfil a number of roles ranging from poverty alleviation and employment creation to international competitiveness. Not only are these very divergent policy objectives, but also the policy instruments introduced to meet these objectives can be equally different, ranging from literacy training to technological advice. Accordingly (and presumably for political reasons), determining clear priority groups is urgent, be it the targeting of more efficient promotion activities towards the more productive SMMEs, or to better assist survivalist, mainly black-run endeavours.

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