Employment creation through SMEs

Archive content: This project has been completed, and the information is retained here for archive purposes. Current project work in Southern Africa can be found here.

There are a number of market entry barriers faced by small to medium scale enterprises (SMEs) as they try to make a living in an economy that does not offer equal opportunities. Limited access to precision engineering equipment, capital and information, are some of the barriers faced by skilled and semi-skilled artisan as they try to run viable business ventures. The situation is worsened by the large number of people being retrenched as Zimbabwe's economic environment worsens.

Case study: creating employment through SMEs in Bulawayo

Started in 2002, the Bulawayo Light Engineering Project provides an avenue for small-scale entrepreneurs in Bulawayo and the broader Matabeleland Province to create economic self-reliance. This is achieved through a service centre where artisans hire time on precision machinery, as well as Business Shop, where capital goods are then sold.

Access to such equipment has enabled the entrepreneurs to expand their product range to meet the diverse range of customer requirements. Grinding mills, food processors, agricultural and construction equipment are some of the capital goods being produced.

An average of 100 artisans are regular users of the equipment hired out at the service centre.

Because these artisans, who have either been retrenched from formal employment or are unable to find formal employment, have this equipment available for hire they are able to manufacture a wider variety of products and of a higher quality. As direct result of the project has been increased incomes for artisans with some recording monthly incomes in the region of £450-£1,000 per month.

The project also focuses on making contribution to the development and implementation of more enabling policies for SMEs. To this end, strong relationships and linkages have been cultivated and maintained with the Ministries of SMEs and Science and Technology.

The major lesson emerging from this initiative is that technology is key to unlocking innovation and productivity among SMEs.

One of the artisans, Leston Chasamuka, utilising the Centre's machinery

One of the artisans, Leston Chasamuka, utilising the Centre's machinery

The project is developing and testing a model for the creation of sustainable jobs and incomes among small-scale and marginalised artisans. It also seeks to increase opportunities for entrepreneurs to create or expand their businesses by making small-scale and affordable capital goods readily available. Ultimately, the model will be documented, shared and disseminated widely if successful.

Direct beneficiaries of the project consist of the retrenched and recently qualified and unemployed artisans in Bulawayo. They will have access to hi-tech engineering equipment that enables them to expand product range, improve product quality and meet the needs of more discerning customers and increase their earnings. Jobs and incomes will be created in the process.

100 artisans currently hire machines from the service centre at least once every month while 50 hire machines on a weekly basis. 

Greater and wider benefits will, however, go to indirect beneficiaries. These consist of small enterprises that will purchase equipment and capital goods produced by artisans to start their own businesses. 20 small-scale capital goods consisting of maize grinding mills, peanut butter makers and candle moulds were sold during the year under review. 

The main benefits consist of increased incomes for artisans and small producers that buy capital goods and start their own businesses. Some of the most successful artisans have reported monthly incomes in the region of £450-£1,000 per month. Jobs have also been created for unemployed people especially youth and women. These groups usually suffer more unemployment levels than men do. Each artisan who is a regular user of equipment provided by the service centre employs at least one assistant artisan. The project has therefore contributed to the creation of at least 200 sustainable jobs.

The project also focuses on making contribution to the development and implementation of more enabling policies for SMEs. To this end, strong relationships and linkages have been cultivated and maintained with the Ministries of SMEs and Science and Technology. Over the last two years, Practical Action has been consulted by the Ministry of SMEs in the development of policies for that promote the creation and growth of SMEs. 

The last year of the project will focus on promoting commercial viability and sustainability. In this respect, production of small-scale capital equipment identified as having high demand on the market will be vigorously pursued.

The project has benefited poor people consisting of recently qualified artisans and retrenched artisans. 100 artisans hire machinery from the service centre at least once a month. 50 of them are regular users and visit the service centre at least once per week. The project has also benefited the rural poor who are keen to start their own income generating enterprises. Those formally employed but keen to start their own businesses have also benefited. During the year under review, 10 new businesses were started by people who bought equipment from the project while another ten businesses expanded after purchasing additional equipment.

One of the artisans, Leston Chasamuka, utilising the Centre's machinery

Artisans have benefited from accessing precision engineering equipment through hire at affordable fees

Artisans have benefited from access to precision engineering equipment through hire at affordable fees. This enables them to move into the production and sale of high quality and diversified small-scale capital goods and thus realise higher incomes.

The rural poor and people in low-income formal employment have access to a wide range of competitively priced small-scale capital goods. Finance to buy small-scale capital goods to start or expand businesses is raised mainly from personal savings and loans. The capital goods consist of grinding mills, peanut butter makers, candle moulds, treadle pumps, marula processing machines and manual oil pressing machines.

Case study: creating employment through SMEs in Bulawayo


Further information - more on small-scale light engineering projects in Zimbabwe

Articles and news items from Practical Action Southern Africa's Appropriate Initiatives newsletter:

no comments