The formation of extraordinary beaches in Addu City during this quarantine has undoubtedly shown that the citizens of Addu City are extremely talented. But this is not all as these skillful citizens have also begun to shown their talents through Small and Medium Enterprises (SMEs). From making delicious desserts to making glorious hand-made jewelries, we are sure that the talents of Adduans are limitless. But what could be the reason for the sudden thrive in SMEs in Addu City?
What are SMEs?
SME stands for Small and Medium Enterprises, meaning any businesses with employees fewer than 250 will be considered a SME. These business allow people to show their talents, while being able to generate profit from the results. Therefore, the development of SME is considered a crucial element in the development of
the Maldivian economy.
While there are over 7,000 registered companies in the Maldives, half of these are considered to be inactive and majority includes in the category of micro, small, or medium-sized businesses. On the other hand, there are a vast amount of unregistered SMEs in the country that are operating informally, mainly for the purpose of providing goods and services to the local economy. Due to this, the ADB report has shown either no progress or very little in the contribution of SMEs to the GDP of the country for years. But the recent thrive of SMEs in Addu City (and various other parts of the Maldives as well) insists on bringing a change to these numbers.
What could be the cause of sudden SME growth in Addu?
The ongoing Covid-19 pandemic throughout the world has brought unexpected changes to our lives. Some of the most undesirable changes that many of us have faced include of being sent home on no pay leaves and losing our jobs as well. The boredom of having to stay at home has made all of us miserable to some extend. But Adduans refused to have their time wasted by simply remaining at home and doing nothing productive.
Perhaps the idea of SME only rose to get rid of the boredom, or to earn money. It first began with one business, then two and later more. People either got encouraged to discover their own talents and open their own SME or to purchase the beautiful products these new SMEs were serving. After all, who doesn’t appreciate pure talent?
Whatever the reason may be, to simply earn money or to present their talents, what is important is, for the people to gain profit and benefits from these SME businesses.
What are some of the benefits of having SMEs?
- Increases production
- Increases exports
- Reduction of imports
- Generates employment
- Helps in lifting poor out of poverty
- contributes to GDP
How to maintain the current growth of SMEs?
- Provide SMEs with subsidies to encourage a business environment.
- Create more opportunities for SME participation in the three main industries (tourism, fisheries and agriculture) of Maldives.
- Provide technological capacity for SMEs to accomplish the growth and development quickly.
- Raise awareness
- Encourage the business
- Promote local products in the domestic market and facilitate their export.
- Support and develop traditional crafts practices in the atolls.
- Reduce importing all types of products.
- Encourage women to participate in the SME sector
- Revive the crafts industry by utilizing modern machinery and facilitate the trade of local souvenirs in the tourist market.
While there are already over 20 new SMEs thriving in Addu City, we hope that such positive impacts which are a result of this pandemic will affect the same way on the citizens of different parts of the country. Hopefully, this is the start of the immense growth of SME sector of Addu and Maldives as a whole.