It has been three years since the African Development Bank launched a programme in Madagascar to support the growth of small and medium-sized enterprises in the country.
Objectives: To enable them to achieve economies of scale and create better employment opportunities for women and young people in key sectors of the Malagasy economy, in order to reduce inequality and poverty by building on private sector development.
Dubbed the SME “Business Linkage Program”, this programme, which already exists in Ghana and Senegal and is being prepared for the G5 Sahel countries, contributes to achieving one of the African Development Bank’s major objectives: to stimulate economic growth and social progress in Africa.
A new call for applications has been launched, open to all Malagasy small and medium-sized enterprises wishing to join the programme. By mid-October 2022, 150 small and medium-sized enterprises will be selected to participate.
Launched in September 2020, the SME Business Linkage programme has already benefited a first contingent of Malagasy small and medium enterprises.
Some 300 Malagasy small and medium-sized enterprises operating in various economic sectors, 40% of which are run by women and young people, have taken part in the programme since its launch. A total of 607 enterprises from all over the country applied for the first year of the programme; 183 formal small and medium enterprises were selected and 141 actually completed the programme.
The small and medium-sized enterprises selected in this first phase come from 15 regions of Madagascar (58% from the Analamanga region, 8% from Vakinankaratra, 5% from Atsinanana, and 4% from Boeny). Half are run by women, 42% are young entrepreneurs under 35, 57% have 5-10 employees, 53% have been in business for less than 5 years and 32% have been in business for 6-15 years. In addition, 45% operate in the agribusiness sector and 16% in the service sector.
The SME Business Linkage programme has three thrusts, relating to access to skills, market and finance.
Regarding “access to skills”, participating businesses benefited from a capacity building programme in entrepreneurial culture, diagnostics, business plan development, and training in managerial skills, coaching and mentoring, as well as facilitating business linkages. Beneficiaries were also given the opportunity to undertake immersion internships in established companies.
The market access component, which concerns the establishment of a digital platform for connecting micro, small and medium-sized enterprises with large established companies, is underway. This platform, which will be called “Mada Business Linkage”, will allow – among other things – large companies involved in the provision of goods and services to publish their needs for micro, small and medium-sized enterprises, via a registration and listing system. The platform will be operational in early 2023; initially dedicated to the beneficiary companies of the programme, it will then be open to any formal company duly registered.
As for the “access to financing” component, a credit guarantee system has been set up with two local partner banks to promote access to financing for small and medium-sized Madagascan companies, so that they can respond to requests from large companies. This can be cash flow or investment financing. The partnership agreements are about to be finalised.
Small and medium-sized Malagasy enterprises wishing to participate in this second phase of the programme, which is due to end in December 2023, are invited to register directly on the page. This call for applications is aimed mainly at small and medium-sized Malagasy companies with a strong potential for commercial links with large companies. Professional groups and chambers of commerce and industry are encouraged to relay the information to their members.
