Enhancing national capacities for unleashing full potentials of
micro-, small- and medium-enterprises (MSMEs) in achieving sustainable development goals
in developing countries
Markara Soth’s micro garment-manufacturing business in Phnom Penh, Cambodia. In Cambodia it is estimated that up to 90% of micro businesses are unregistered and as such the vast majority of businesses like Markara’s are prevented from taking advantage of the benefits of being registered (November 2018).
Micro-, small and medium enterprises and the Sustainable Development Goals (November 2018)
In recent years, Markara Soth’s micro garment-manufacturing business in Phnom Penh, Cambodia, has grown considerably. Employing 8 seamstresses, she hires a room in a local building where she supervises the manufacture of children’s clothes. She sells the garments to various clothing stores in the central market and employs a woman to sell some of the clothes from a small vending station directly to the public.
However, Markara’s business operates under the radar because it is unregistered. Despite the potential, she cannot access more customers or expand her business, sells her clothing for less than they are worth, and in order to continue to operate her business, has paid several bribes to business registration inspecting officials.
But registering a business can be complicated expensive, and it requires contact with and licences from a number of different ministries and agencies. In Cambodia it is estimated that up to 90% of micro businesses are unregistered. The vast majority of businesses like Markara’s are prevented from taking advantage of the benefits of being registered, including credit guarantee schemes, access to finance, state subsidies, access to larger markets, legal protections, operating a business bank account, and state offered technical and managerial schemes.
Had there been an easier and simpler process for her to register her business, Markara’s difficulty could be solved. This is an example of where the UNDESA project entitled “Enhancing national capacities for unleashing full potentials of micro-, small- and medium-enterprises (MSMEs) in achieving sustainable development goals in developing countries” may make a different. Using a country demand-driven approach, the project rolls out several initiatives together with the Government of Cambodia at the national level, including working directly with the Ministry of Industry and Handicraft to simplify business formalization procedures and promoting integration of Cambodian micro-, small and medium enterprises (MSMEs) in the global value chain. Dr. Kimleng Laim, Director-General of the Ministry of Industry and Handicraft, Cambodia, said that “the project would help us build the policy structure conducive for MSME growth. Good practices and examples it shared would be learnt, owned and replicated in the policymaking process.”
These demand-driven activities at country-level are part of the support UNDESA will provide to 8 other countries including Brazil, Kenya, Fiji, Laos, the Philippines, Gambia, Sri-Lanka and Tanzania under the above-mentioned project framework funded by the 2030 Agenda for Sustainable Development Sub-Fund of the UN Peace and Development Trust Fund established with the generous contribution of the Government of the People's Republic of China.
MSMEs have been recognized to have a leading role in meeting many of the SDGs, including promotion of inclusive and sustainable economic growth and promoting sustainable industrialization and innovation. Decent employment and higher income, created by vibrant MSMEs, would create a positive upward push for a higher quality of life, better education, good health, and elimination of poverty, hunger and inequalities, including gender inequality.