A study on analysis of financial challenges of Small and Medium Sized Enterprises (SMEs) in international markets with special reference to blantyre commercial Center-Malawi, Central Africa

Abstract

Small and Medium-Sized Enterprises (SMEs) play a pivotal role in economic development, particularly in emerging markets like Malawi. However, these enterprises face significant financial challenges when venturing into international markets from hubs such as Blantyre Commercial Centre. This study examines the multifaceted financial barriers that impede SMEs' ability to compete effectively in global trade. This study employs a mixed-methods approach, incorporating quantitative data analysis from SME financial records and qualitative insights gathered through interviews with key stakeholders, including SME owners, financial institutions, and government officials. The study focuses on identifying and analyzing the primary financial challenges encountered by SMEs in Blantyre, Malawi, including limited access to finance, high transaction costs, exchange rate volatility, and stringent regulatory environments. Findings reveal that SMEs in Blantyre face substantial hurdles in accessing financing due to high collateral requirements and exorbitant interest rates imposed by traditional financial institutions. Moreover, the high costs associated with currency conversion, international shipping, and compliance with diverse regulatory frameworks amplify the financial burden on SMEs, constraining their capacity for international expansion and competitiveness. The study underscores the urgent need for tailored financial solutions and supportive policies to address these challenges effectively. Recommendations include developing specialized financial products that cater to SME needs, negotiating preferential trade agreements to reduce transaction costs, and enhancing SME capacity in financial risk management and regulatory compliance. By addressing these financial barriers, stakeholders can foster a more conducive environment for SME growth and internationalization in Blantyre Commercial Centre, thereby contributing to sustainable economic development and inclusive prosperity in Malawi and Central Africa.