SMEs are considered as one of the ‘driving forces ‘ of modern economic systems. SMEs ‘ parts in an economic system are in footings of technological upgrading, merchandise and procedure inventions, employment coevals or export publicity. Therefore, assisting SMEs to introduce is of import non merely because it improves their ain fight, but besides through linkages and knowledge spill-overs with other houses, the full industry and macro economic system.
SMEs are a cardinal vehicle for development and growing in any economic system, as they constitute the bulk of endeavors found even in the most industrialized states ( Masatak 1998 and Storey 1994 ) . SMEs create employment, a beginning of invention, bring forthing export chances among other ( Hall 1995 ) .
In Mauritius, the part of the little graduated table sector in speed uping the economic development procedure and the democratization of the economic system is widely recognised. SMEs in Mauritius have experienced a rapid addition, particularly with the authorities promoting people to put up their ain concern by supplying them with inducements, counsel and fiscal assistance in their undertakings. The Government is committed to supplying the contributing environment for the sustainable development of the sector and to react to the altering demands of endeavors in a proactive mode. Over the old ages a figure of inducements have been introduced to further the development of the sector.A
The term SME covers a broad scope of definitions and steps, changing from state to state and changing between the beginnings describing SME statistics ( Gilaninia, Amiri & A ; et Al. 2011 ) . Therefore there is no universally accepted definition of a little and medium concern. The definition of what constitutes a SME varies ( Taylor and Adair 1994 ; Reed, 1998 ) ; it is by and large based on the figure of employees and fiscal turnover.
Harmonizing to SMEDA Act 2009 in Mauritius, an “ endeavor ” means any signifier of trade or industry, trade by manus or pes, cultivation of fruits, veggies or flowers, farm animal genteelness, or activity approved as such by the Authority. A little endeavor is an endeavor holding an one-year turnover of non more than Rs 10 million while a medium endeavor is an endeavor holding an one-year turnover of more than Rs 10 million but non more than Rs 50 million.
In Mauritius SME has been redefined, where antecedently the volume of investing in equipment which was one million up to Rs 10 million which was taken into history, is now classified as a little endeavors and with less than 50 and 200 employees for little and average graduated table severally.
SME Evolution in Mauritius
Since independency, Mauritius has practised a consistent policy to promote the creative activity and publicity of SMEs. SMEs in Mauritius can follow their history back to the sixtiess when Mauritius was in the aftermath of a timid industrialization procedure with an import-substitution scheme. The state has moved off from a mono-crop economic system with fast population growing and high unemployment to one that is more dynamic and diversified. The beginnings of variegation have been agribusiness, fabric, touristry and more late international services with Offshore and Freeport activities. The sugar sector provided the start-up capital for the Export Processing Zones ( EPZ ) . The rapid rate of growing of investing in the fabrication sector led to the success of the EPZ and the Mauritanian economic system as a whole. This was made possible by the assurance of enterprisers and foreign investors predominating in the state at that peculiar clip.
The authorities recommended the variegation of the economic system with the creative activity of Export Processing Zones in the early 1980 ‘s. The EPZ sector took advantage of duty-free and quota free entree into European Union markets every bit good as duty penchants granted by states such as North America and Japan. The mid 1980s witnessed a fabric roar, raising per capita incomes and life criterions. The creative activity of EPZ endeavors has been outstanding in absorbing big Numberss of unemployed individuals who otherwise would ne’er hold been gainfully employed.
In 1976 the Small Scale Industry Unit ( SSIU ) was established under the auspices of the so Ministry of Commerce and Industry. It besides became the cardinal point in the ministry to supply general advice and counsel to little entrepreneurs.A The SSIU became the Small Industry Development Organisation ( SIDO ) in 1983 as it was progressively being advocated that an apex administration with a legal model for the SSI sector and an incorporate policy attack were required.
The Industrial Expansion Act of 1993 was enacted in the spirit of consolidation and strengthening of the bing institutional model and support to industrial development in the state. The Small and Medium Industries Development Organization ( SMIDO ) Act was adopted which was itself portion of the Industrial Expansion Act was established as a parastatal body.A It was the following most of import landmark in the publicity of SMEs. Its vision was a strong and modern SME sector that was efficient, competitory and export-oriented.A
In 2005, following the amalgamation of the Small & A ; Medium Industries Development Organisation ( SMIDO ) and the National Handicraft Promotion Agency ( NHPA ) , the Small Enterprises & A ; Handicraft Development Authority ( SEHDA ) was created. The purpose of the amalgamation was to rationalize and optimize the usage of resources dedicated to the little concern sector in Mauritius.
The debut of a new act, the Small and Medium Enterprises Development ( SMEDA ) Act 2009 is the latest development with respects to SME policy model in Mauritius. The SMEDA promotes the development and growing of the SMEs in Mauritius. SMEDA provides support to possible and bing little and average endeavors with a position to enabling them to get down new endeavors.
Over clip, the form of economic competition has changed. With the liberalisation of trade and commercialism it is clear that as the planetary economic system continues to travel towards increased integrating. With the onslaught of globalization and the attach toing dismantlement of trade penchants, the challenges confronting the SME sector are ever-growing and acquiring more and more complicated. SMEs are progressively capable to terrible competition from low-priced bring forthing states. However, as a consequence of progresss in information and communications engineering ( ICT ) and the decrease in trade barriers, some of the greatest chances for SMEs will deduce from their ability to take part in the regional and international markets.
SMEs ‘ flexibleness and adaptability are cardinal determiners to take advantage of the promises of globalization. New engineering, new merchandises, new markets and new direction constructs are invariably emerging to alter industrial competitory advantage ( Ling X, Li, 2000 ) . Similarly, the World Bank ( 1999 ) suggests that endeavors in developing states including Mauritius are confronting far more competitory environments in this fast-moving technological universe. Hence, the Mauritanian authorities believes that the existent engine of sustainable and just growing is in the SME sectors.
SMEs in Mauritius have obtained the aid and support of the authorities to ease the publicity of their concern. Many of them export their merchandises to states abroad and this contributes significantly to the economic growing of the state. However, in the epoch of globalization, the environment in which these SMEs operate is going more and more ambitious, and, in bend, they need to run expeditiously within tight deadlines to be able to last. To react to the turning competition faced by administrations, Bankss have introduced the Internet Banking service to let their clients undertake their banking minutess online, anytime and anyplace. Internet Banking enables houses in Mauritius to cover with both their local and international clients by leting them to transport out their banking minutess even outside normal bank gap hours.