2. Common Problems

It is clear from the two preceding paragraphs that there are a number of common problems or challenges faced by SMEs in the South Asin Region. These problems are mention below:
• Lack of credit/finance/capital - the cost of capital is often prohibitive, and in times of economic uncertainty, lenders tend to be very risk averse.
• Access to technology - the digital divide is a significant problem in many countries. Improving access to technological networks of international standard is also very expensive.
• Training/human resource development - this covers both on-the-job training and the broader education system. There is a strong need to improve skill bases in a range of areas.
• Funding for research and development - SMEs lack assistance both for developing new ideas and turning these ideas into commercial products.
• Extent of government regulation/compliance costs - this can range from taxation and reporting requirements to laws to promote occupational health and safety or to end discrimination in hiring practices. The cost of complying with national and international standards (e.g. ISO) can also be very expensive for SMEs. Government policy should be directed at increasing and promoting transparency across all areas of the government sector.
• WTO commitments - especially for developing countries, compliance with government commitments in the WTO (such as TRIPS etc) can be difficult for SMEs.
• Weaknesses in transportation and infrastructure - this can affect access to markets and business revenue (telecommunications, ports, airports, road networks).
• Limited information on possible markets and clients - many SME owner/operators have little experience in exporting into foreign markets. What should the government's role be in trade facilitation and trade promotion?
• Broader economic situation - SMEs are often the most vulnerable in times of economic recession. Lack of insurance and subsequent business failures can often make the economic situation worse.



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