The Minister of Trade and Industry, Francois Kanimba, Thursday, told Senate that out of the 123,526 small and medium enterprises operating in the country, close to 90 percent neither pay taxes and nor are they registered.
Kanimba made the remarks while presenting the status of SMEs to senators. He referred to the SMEs Establishment Census 2011, which indicates that SMEs operating in the private sector constitute 96.5 percent (119,158) of businesses in Rwanda.
“SMEs that are categorised in the formal sector are those that pay taxes and have all the required documents; they account for 11.4 percent of the establishments,” said Kanimba.
He added that the size classification of enterprises varies within regions and across the country, relative to the size of the economy and its endowments.
So far, Kigali city hosts the biggest percentage of SMEs while the Northern Province has the least number of operational SMEs.
52 percent of all SMEs in the country are wholesale and retail business, the minister said.
“SMEs are challenged with lack of an entrepreneurial culture, limited technical and business skills, limited access to business development services, lack of access to finance and difficulty in accessing markets.”
He added that to overcome such challenges, an SME Policy was passed in June 2010 with the vision of creating a critical mass of viable and dynamic SMEs that would significantly contribute to national economic development.
Kanimba, however, later unveiled a government plan to empower SMEs and address the problems they face.
Following his presentation, senators requested the government to expedite all measures meant to empower SMEs.