- A business is the activity of making one’s living or making money by producing or buying and selling products
- MSMEs in developing economies are viewed as engines of economic development
Matsapha-The Micro, Small, Medium, Enterprises (MSME) Business Clinic and Networking Forum was held at the Esibayeni Lodge in Matsapha and was hosted by the Eswatini Bank.
Among the presenters was the Director of the Medium, Small and Micro Enterprises (MSME), Mluleki Dlamini who spoke about the importance of establishing businesses. Dlamini explained that a business is the activity of making one’s living or making money by producing or buying and selling products (such as goods and services). It is also “any activity or enterprise entered into for profit. He also explained that entrepreneur is a person who sets up a business or businesses, taking on financial risks in the hope of making profit.
In Eswatini MSME’s are categorized into three main groups. They are Micro whose assets are valued at less than E50 000, Small whose assets are no more than E2 million and medium enterprises whose assets are valued up to E 5million.
The largest number of business enterprises that operate in the country are wholesalers and retail business followed by agriculture and the least are business services.
There are several financial schemes that are available for Emaswati to access in order to assist them establish businesses such as the E45 Million MSME Revolving Fund Housed at Eswatini Bank with a maximum loan capacity of E100, 000 over 36 months at 5.5%. The Informal Traders Revolving Fund (ITRF) This scheme is housed at FINCORP and benefits informal traders with loans of up to E5, 000 payable over 6 months at 1% interest.
The Youth Enterprise Revolving Fund (YERF) This scheme is for the youth between 15 – 34 years and is managed by the Youth Enterprise Fund with a maximum loan of E150, 000.
The Small-Scale Enterprise Loan Guarantee Scheme (SSELGS) This is a collateral scheme managed by Central Bank of Eswatini. Businesses can be provided collateral at 95% and 85% for start-ups and existing businesses, respectively and finally the Export Credit Guarantee Scheme (ECGS), a facility for businesses in the export market which is also housed at the Central Bank of Eswatini.
In her presentation the Managing Director of Eswatini Bank, Nozizwe Mulela remarked that MSMEs in developing economies are viewed as engines of economic development. Owing to their private ownership, entrepreneurial spirit, flexibility, adaptability as well as their potential to react to challenges and changing environments, SMEs contribute to sustainable growth and employment generation in a significant manner.
“MSMEs are of strategic importance to national economies as they often directly benefit the poor and vulnerable, particularly women and youth, thereby directly reducing poverty, increasing income and positively impacting on household investments such as education and health over time.”
Mulela drew the participants attention to the fact that “Eswatini Bank, whose main mandate is to develop all EmaSwati through financial services and credit extension, has an SMME Unit driving the SMME funding in all four regions of the country. In the last three years alone, the unit has disbursed funds exceeding E179 million to SMMEs across the country. Total disbursed loans in 2022 doubled because of the E45 Million Revolving Fund. The beneficiaries of this Fund were mainly the informal sector which has always struggled in accessing finance.”
She emphasized that a close working relationship between MSMEs and the Bank is essential to the growth of the bank’s customers and the continued success of the country’s economy.
Discussion about this post