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Imperative of Government Support for Service-Oriented SMEs

Small and medium-sized enterprises (SMEs) in Mauritius have demonstrated remarkable resilience and agility in the face of numerous challenges and crises. Despite their ability to weather these storms, it is evident that relying solely on their resilience is insufficient. Recognizing the pivotal role of SMEs in driving economic growth, employment, and exports, the Mauritian Government has taken proactive steps to create a conducive framework for their progress, particularly in the wake of recent adversities.

𝐒𝐢𝐠𝐧𝐢𝐟𝐢𝐜𝐚𝐧𝐜𝐞 𝐨𝐟 𝐒𝐞𝐫𝐯𝐢𝐜𝐞-𝐎𝐫𝐢𝐞𝐧𝐭𝐞𝐝 𝐒𝐌𝐄𝐬

SMEs are a cornerstone of the Mauritian economy, representing 99% of all enterprises and contributing significantly to employment, Gross Value Added (GVA), and total exports. According to a 2019 handbook by the Ministry of Industrial Development, SMEs, and Cooperatives, SMEs in Mauritius accounted for 50% of employment, 35.7% of GVA, and approximately 12% of total exports. This underscores their substantial contribution to the economic landscape of the country.

𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐒𝐮𝐩𝐩𝐨𝐫𝐭 𝐈𝐧𝐢𝐭𝐢𝐚𝐭𝐢𝐯𝐞𝐬

The Government has demonstrated its commitment to supporting SMEs through various initiatives. Notably, the recently announced Mauritius Budget 2022-23 includes a range of supportive measures for entrepreneurs. One of the key highlights is the proposed amendment to the definition of SMEs, which aims to expand the scope of support. This includes increasing the turnover thresholds for micro, small, and medium enterprises, effectively enabling a larger number of enterprises to benefit from improved access to government support programs and financing. Additionally, the Mauritius Investment Corporation has announced the establishment of a Venture Capital Fund of Rs 5 billion aimed at SMEs and mid-market enterprises, further bolstering support for the sector.

𝐑𝐨𝐥𝐞 𝐨𝐟 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐈𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐢𝐨𝐧𝐬

Financial institutions, such as Cim Finance, have recognized the pivotal role of SMEs in the Mauritian economy and have actively engaged in supporting these enterprises. With SMEs comprising 99% of all registered companies and employing nearly 50% of the national workforce, financial institutions have a crucial role to play in providing the necessary financial support and guidance to help SMEs navigate the current economic challenges. The Ten-year Master Plan for the SME sector, unveiled in March 2017, emphasizes the importance of understanding the impact of the current crisis on SMEs and designing appropriate services to meet their needs. Financial institutions have been instrumental in providing fast, simple, and easily accessible tools to help SMEs ensure business continuity and contribute to long-term economic recovery.

𝐈𝐧𝐬𝐢𝐠𝐡𝐭𝐬 𝐨𝐧 𝐭𝐡𝐞 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 𝐒𝐞𝐜𝐭𝐨𝐫 𝐢𝐧 𝐌𝐚𝐮𝐫𝐢𝐭𝐢𝐮𝐬

The services sector has been a key driver of the Mauritian economy, contributing to approximately 70% of the Gross Domestic Product (GDP). This sector has experienced significant growth, particularly in financial services and tourism. However, the tourism industry faced challenges in 2008 due to global economic slowdown and currency fluctuations in key tourism markets. Despite these challenges, the services sector remains a vital component of the Mauritian economy, with the potential to drive sustained economic growth and recovery.

𝐏𝐫𝐨𝐩𝐨𝐬𝐚𝐥 𝐟𝐨𝐫 𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐒𝐮𝐩𝐩𝐨𝐫𝐭 𝐢𝐧 𝐭𝐡𝐞 𝐍𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐁𝐮𝐝𝐠𝐞𝐭

In the forthcoming national budget, the Mauritian government should consider the following proposals to provide enhanced support to service-oriented SMEs:

1. Financial Assistance: Allocate dedicated funds and financial incentives to support the growth and development of service-oriented SMEs, including grants, subsidies, and low-interest loans.

2. Export Promotion: Provide support for market research, trade missions, and participation in international trade fairs and exhibitions to facilitate the export of services to foreign markets.

3. Regulatory Reforms: Simplify regulatory processes, harmonization of definition of export oriented enterprise and create a conducive business environment to reduce bureaucratic hurdles and promote entrepreneurship in the service sector.

4. Collaboration with Financial Institutions: Foster collaboration with financial institutions to provide tailored financial products, investment advisory, and risk management support to service-oriented SMEs.


As Mauritius navigates the challenges posed by the global pandemic and economic uncertainties, the forthcoming national budget presents a strategic opportunity for the government to provide targeted support to service-oriented SMEs. By prioritizing measures aimed at fostering growth, increasing competitiveness, and facilitating market access, the government can unlock new opportunities for SMEs to thrive and contribute to the Mauritian economy. Collaboration between government agencies, financial institutions, and industry stakeholders is essential to catalyze the growth and development of the service sector. Investing in service-oriented SMEs is imperative for driving sustainable growth and positioning Mauritius as a global leader in services innovation and excellence.

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