SMEs struggle to secure contracts: Indongo

17 Jul 2014 15:20pm
WINDHOEK, 17 JUL (NAMPA) - Small and medium enterprises (SMEs) struggle to secure big contracts from the public and private sectors due to competition with larger companies in the country, a recent report suggested.
Dr Nelago Indongo, the director of the Multi-Disciplinary Research Centre at the University of Namibia, said this whilst presenting the findings of a report titled ‘The scope of procurement and the need and/or relevance of procurement financing for SMEs in Namibia’ in the capital on Thursday.
The report was commissioned by the Namibia Procurement Fund (NamPro Fund), and supported by the German Federal Enterprise for International Cooperation (GIZ) and the Ministry of Trade and Industry.
The study was conducted during the period May to July 2013.
The overall objective of the study was to provide a detailed understanding of the current status of the procurement of goods and services within the public and private sectors, as well as to evaluate the relevant potential benefits and impact of procurement finance for SMEs in Namibia.
Indongo said the research was conducted among 184 SMEs countrywide, 14 selected NamPro Fund clients, public and private procuring entities as well as financial institutions providing funding to SMEs.
“SMEs are also facing a challenge of the late payment of invoices by procuring entities, lack of funds to execute contracts and a lack of skills to complete tender documents,” she noted.
Indongo said the financial institutions listed SME impediments as low turnover on bank accounts; unfavourable credit history; a lack of skills, training and experience in business; a lack of appropriate collateral; and a lack of own financial contributions.
The procuring entities also indicated that the lack of policy directives hindered procuring entities from implementing preferential procurement policies.
Indongo said the procuring entities further listed limited technical capacity for SMEs to execute technical and complex contracts. Thus, they tended to prefer doing business with existing suppliers, while the lack of a track record for SMEs hindered access to new supply contracts.