Malawi’s MSME sector contributes approximately 40% to national GDP. Yet several obstacles restrict the growth of the MSME sector, which in turn restrict the growth of the overall economy. These include: limited access to financial services such as credit and banking, limited business training, informality, high costs of complying with regulations and an overall poor environment for conducting business. High business registration and tax compliance costs mean that only 11% of MSMEs are registered and pay tax, cutting into the government’s revenue base. Additionally, the current predominantly paper based tax system poses a large cost on the Malawi Revenue Authority (MRA).
The Costs and Benefits of Government Services to Support MSMEs in Malawi
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