Exploring Alternative Sources of Financing Small and Medium Enterprises (SMEs) in Malawi : Lessons from Elsewhere

Small and medium enterprises are the backbone of any economy and Malawi is not an exception. However, there are many structural, institutional and regulatory challenges bedeviling SMEs and these are more pronounced in developing countries like Malawi. One major area challenging the survival and growth of SMEs in Malawi is access to finance. The only readily available market for financing has been the commercial banks whose interest rates have always been exorbitantly high. This article tries to undertake a review of other alternative financing mechanisms that Malawi can explore to promote the SME sub-sector. This was done by reviewing practices from other jurisdictions. Available options include equity guarantee schemes, equity investment schemes and capital markets approaches that do not involve listing