AMBITIOUS 10% MANUFACTURING TARGET FOR MSMES

EZULWINI – Government has set an ambitious target to strongly bolster the MSME industry.

Minister of Commerce, Industry and Trade Manqoba Khumalo has pointed out that the Industrial Development Policy of Eswatini 2015 - 2022, aims to promote a broad based industrialisation path by increasing the participation of MSMEs in the manufacturing sector by 10 per cent. “I am confident that this is achievable if all stakeholders work together towards the goal of industrialisation as further espoused in the SADC Regional Agenda 2063,” said Khumalo. The minister recounted that the Financial Stability report June 2018 of the Central Bank of Eswatini indicated that there was an 11 per cent decline in Micro, Small and Medium Enterprises (MSME) assets between 2016 and 2017 and a 20 per cent decline in the profitability of this sector in the same period.

“Today’s call to you is that we should reverse this situation. I am confident that if financial institutions, for instance, were to ease their lending requirements there would be an increase in manufacturing ventures and asset acquisition by SMEs. We all need to play our part to resuscitate the economy and propel our country to vision 2022,” Khumalo highlighted. Khumalo mentioned that access to finance remained elusive for most MSMEs in Eswatini. He said this was despite the establishment of Development Finance Institutions (DFIs) whose sole mandate was to provide accessible and affordable funding for MSME start-up enterprises.

“It appears that the DFIs have adopted a risk-aversion stance concerning lending money to SMEs yet the expectation is that they should be the most forthcoming in providing start-up financing. In your discussions, later on, I implore you to critically evaluate the role of funding institutions in creating an enabling environment for the unearthing of innovative business ideas through financial inclusion of the SME sector,” said Khumalo. The minister said he was encouraged by the idea of creating closer working ties between business services providers and financial institutions. He urged banks and non-bank financial institutions to clearly articulate their requirements for credit so that those assisting the entrepreneurs with the development of business plans could address these before forwarding any loan application.

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