In recent years, the frequency of erratic and extreme weather events such as cyclones, resulting floods and landslides, as well as severe droughts have increased in Malawi, Zambia, and Botswana as a result of climate change. Research suggests that the extent and intensity of drought events, and occurrence of heavy rainfall will further grow in a number of countries in Southern Africa. The region’s high dependence on climate-sensitive sectors such as agriculture, tourism, fisheries and forestry, low and unevenly distributed income per capita, high rate of unemployment and insufficient infrastructure, contribute to a high vulnerability of communities in Southern Africa to the effects of climate change.

Eco-inclusive, small and medium enterprises (SMEs) can play a crucial role in contributing to climate change resilience by offering market-based solutions which help communities adapt to the effects of climate change. As the economic backbone of Malawi, Zambia, and Botswana, SMEs contribute significantly to employment generation and livelihood support. They are thus key to alleviate poverty while helping communities cope with the risks of climate change. Eco-inclusive enterprises in the adaptation space are innovative, versatile, adaptive and entrepreneurial, and thus able to exploit technological or commercial opportunities linked to climate change adaptation that are neglected by larger companies. However, many small and growing enterprises are unable to start-up and scale-up in light of significant barriers to accessing tailored business development services and long-term financing solutions.

From Challenges to Sustainable Development Opportunities

The SEED Malawi National Dialogue Forum 2024 brought together more than 100 entrepreneurs, policymakers, financial institutions, business development service providers and other key actors supporting entrepreneurship from Malawi, Zambia and Botswana to celebrate 10 years of SEED driving impact through eco-inclusive partnerships and innovation in Southern Africa.

Through hands-on, collaborative formats and a diverse mix of stakeholders, the Malawi National Dialogue Forum explored major themes relating to the role of entrepreneurship across sectors in achieving core development aims, including for gender equality and sustainable resource management.

Opening & Keynote Speeches in Plenary

In his opening remarks, Nations Msowoya, Director of Planning at the Ministry of Trade and Industry, stressed the important role of small and medium-sized enterprises (SMEs) in creating jobs and contributing to economic growth. Mr Msowoya  the commitment of the Government of Malawi in creating an enabling environment for SMEs to grow and scale their operations as underlined by Malawi’s 2063 Vision to become a self-reliant, industrialised, and at the same time environmentally sustainable economy, with a strong and competitive manufacturing industry.

Keynote speaker, Laurijn van Steenbergen, Diplomat for the Government of Flanders and Deputy General Representative to Malawi, reflected on the importance of eco-inclusive entrepreneurship for sustainable economic growth while underlining the Government of Flanders’ ongoing commitment to support important initiatives like SEED. Mr van Steenbergen highlighted the Government of Flanders’ recently launched Country Strategy Paper IV (2024-2028) that will continue collaboration with the Government of Malawi in the agricultural sector, with a focus on inclusive development, agricultural commercialisation, and climate smart agriculture.

Frank Washon of Hortinet Foods Enterprise, 2015 SEED Award Winner, mobilised participants by sharing his testimony on how winning a SEED Award transformed his business. After receiving technical and financial support through the SEED Catalyser and Accelerator programmes, SEED linked Hortinet to impact investor Hivos who invested 250,000 Euro enabling Hortinet to set up the first commercial plant tissue culture laboratory in Malawi. Through Hivos’ investment and additional supported received from the Government of Flanders, Hortinet was able to substantially increase its operations. Learning from the enterprise’s journey to scale, Mr Washon shared that entrepreneurs in Malawi continue to face many challenges, especially when it comes to accessing finance. He called on financial and lending institutions in particular to develop and extend access to financial solutions that target the needs and cater to the lending profiles of start-ups.

Julia Rohe-Frydrych, Co-Lead Green Entrepreneurship, adelphi & SEED Head of Programme reflected on 10 years of SEED supporting eco-inclusive entrepreneurship in the Southern African region with the generous support from the Government of Flanders. Across the four focus countries in Southern Africa, Botswana, Malawi, Zambia and Zimbabwe, SEED has provided technical and financial support to 223 micro, small and medium-sized enterprises at different development stages and operating across various sectors such as agriculture, waste management, green energy and biodiversity. Ms Rohe-Frydrych stressed that according to a recent survey, SEED supported enterprises globally have an exceptional survival rate of 85% while substantial challenges remain to consolidate and grow their business operations. As SEED Head of Programme, Ms Rohe-Frydrych stressed the impact potential of eco-inclusive entrepreneurship in promoting an inclusive and climate-smart economy.

PANEL DISCUSSION | Enabling Green Finance for SMEs in Zambia and Malawi

The panel discussion co-hosted by the Biodiversity Finance Accelerator (BioFA) examined access to finance as one of the key obstacles for eco-inclusive SMEs to grow and scale their operations. The discussion, moderated by Tione Kaonga, SEED Malawi Coordinator and Executive Director of Umodzi Consulting, involved Frazer Handondo, founder of Forest Africa Zambia, 2023 SEED Award winner from Zambia, Kapoche Mwale from the Women Entrepreneurship Access Centre (WEAC), a Business Development Service (BDS) provider from Zambia as well as Godfrey Byekwaso, Deputy Managing Director for Centenary Bank Malawi and Jonas Restle-Steinert, Co-Lead Green Entrepreneurship at adelphi and SEED Head of Programme.

The panel discussion emphasized on key challenges of eco-inclusive SMEs in accessing finance, including high interest rates, collateral requirements and lack of information on loan application procedures while also looking into barriers from the perspectives of financial institutions like high transaction cost and risk profiles of eco-inclusive SMEs. In order to ease access to finance for eco-inclusive SMEs, the panellists raised the need for building trust between SMEs and financial institutions to foster mutual understanding. Another approach that was discussed evolved around de-risking mechanisms to make capital more affordable to eco-inclusive SMEs.

PITCHING SESSION | Public showcase of SEED Climate Adaptation Champions

In this pitching session, the SEED 2021 and 2023 Climate Adaptation Award winners were invited to pitch their eco-inclusive business models:

• Frazer Handondo, Forest Africa Zambia (Zambia)
• Fishani Msiska, ZASOLAR (Malawi)
• Timothy Munthali, Tawonga Cooking Oil Processing Enterprise (Malawi)
• Harry Malichi, Wuchi Wami (Zambia)
• Olayemi Olakunle Aganga, Maungo Craft (Botswana)
• Didintie Moreki, Organic Naturals Skincare (Botswana)

PANEL DISCUSSIONS | Empowering Futures - Harnessing Incubation Hubs for Youth Employment

The second panel discussion co-hosted by CRS Malawi debated the topic of youth employment and how the Technical and Vocational Education and Training (TVET) sector and universities can support effective incubation of business ideas developed by their students and graduates. The discussion examined the gap between skills development by TVET colleges and universities vis-à-vis the skills required by industry. Engaging the industry closer in curriculum development to develop skillsets fit for the job market were discussed as one way to overcome this discrepancy. Another key insight of the discussion evolved around the lack of employment opportunities for TVET and university graduates and the required mind shift for graduates to strive for self-employment supported through targeted entrepreneurship training support.

PARALLEL SESSIONS | Practitioner Labs on Inclusion: Unlocking the Power of SMEs for Equity

This session that was co-hosted by the Biodiversity Finance Accelerator (BioFA) aimed at mapping key challenges of three impact areas related to the overarching topic of inclusion. The session was initiated by three input presentations, setting the scene for the three sub-topics:

Political Inclusion: Maria Chiponde from Kibébé International, 2019 SEED Award winner, highlighted the importance of providing economic opportunities and participation of politically marginalised groups such as refugees.

Kibébé designs and handcrafts baby products, accessories and décor to provide employment for artisans who live in and around Dzaleka refugee camp in Malawi.

Gender Inclusion: 2021 SEED Award finalist, Thokozani Chimasula from Tac-Maz Sustainable Ventures underlined the need to empower women to take an active role in the (green) economy in Malawi. Ms Chimasula stressed that ironically, women constitute 70 per cent of full-time farmers in Malawi but at the same time, women are most severely affected by food insecurity compared to men.

Tac-Maz Sustainable Ventures grows vegetables and fruit and raises different breeds of livestock organically. The enterprise empowers women farmers in their network to form cooperatives and provide them with technical support in sustainable horticultural production to increase productivity and environmental conservation.

Financial Inclusion: Lynda Ndovie-Jere, Country Program Coordinator at United States African Development Foundation (USADF) examined the topic of financial inclusion, building on the findings from the panel discussion on “Enabling Green Finance for SMEs in Zambia and Malawi”.

The United States African Development Foundation (USADF) supports SMEs in Malawi with technical support and grant schemes with a focus on agricultural production and value-added agro-processing of marketable and sustainable produce, particularly rice, horticulture, tree crops, legumes, and oilseeds.

The key findings from the parallel sessions include the following:

• Political and gender inclusion (inclusion of marginalised groups)

Marginalised groups are less likely to access financial services offered by financial institutions. This is partly due to their lack of formally titled collateral. Marginalised groups moreover lack access to educational opportunities and technology and, due to societal structures, are less included in the labour force and other area. Potential solutions discussed during the session included the implementation and enforcement of gender-related policies, handicapped regulations and the “do no harm” principle. Also, women inclusion in program design, decision making and policy formulation was raised as a means to increase inclusion and representation of women and other marginalised groups. Complementary, awareness raising and civic education for both, men and women to understand their roles in different sectors can contribute to foster inclusion. With regards to employment, legal quotas for women and other marginalised groups are a proven means in other countries and regions.

• Financial inclusion

Financial operating procedures are a prerequisite for SMEs to access commercial financing. IT solutions and applications like the bookkeeping and Accounting App can ease financial record keeping for SMEs to make them investment-ready. Another challenge already raised during the panel discussion on access to finance is the lack of collateral. SMEs can tackle this by slowly increasing their asset base as, for example machinery and registration certificates of trucks are also widely accepted as collateral by financial institutions. Furthermore, SMEs should make sure to register their business under the name of the business instead of under the owner’s name to ensure access to business loans. Peer-to-peer lending was discussed as another solution to increase access to finance for SMEs with complimentary business models that hand in a joint loan application. Banks can support SME lending by providing simplified templates for SMEs to prepare their loan application while providing structured feedback on submitted applications that were not accepted for financing. A staggered trust building approach to build a relationship between the future lender and the bank can also ease SME lending, accompanied by awareness creation on both sides on good practices from other countries that could be transferred to Botswana, Malawi and Zambia.