E45M FUND: ‘SIMPLIFY PROCESS, CAST NET WIDE’

MBABANE – Business Eswatini (BE) has made a call to government to ensure that the MSME revolving fund is made easily accessible.

Eyes are still on government, through the Ministry of Commerce, Industry and Trade, to announce the modalities of the E45 million micro, small, and medium enterprises (MSME) revolving fund. The pronouncement was not made yesterday as expected, with government saying a new date would be communicated in due course.

While the wait continues, BE has also made suggestion on how it should be administered. CEO Nathi Dlamini shared suggestions, but he was quick to highlight that BE would not want to pre-empt what the Ministry of Commerce, Industry and Trade had planned.

“However, in terms of administration we do expect the MSME revolving fund to be easily accessible; and for the net to be cast wider for potential beneficiaries (especially those excluded from the E90 million relief administered by the Eswatini Revenue Authority). We also hope it will have simplified procedures for access to loans, and most crucially, we hope it will offer more favourable terms, including interest rates that will not be punitive,” said Dlamini.

distressed

The fund, which will come in handy for distressed MSMEs in these times of COVID-19 was announced by Prime Minister Ambrose Mandvulo Dlamini on August 3 this year. 

The premier said the fund was targeted at assisting small and medium businesses that have been adversely affected by the impact of the COVID-19 pandemic, saying modalities and details on it would be announced by the Ministry of Commerce, Industry and Trade in due course

Meanwhile, Dlamini noted that the cash-flow crisis caused by COVID-19 and its attendant market disruptions was well documented.

“On the supply side, companies have been experiencing sourcing bottlenecks running across from all over Africa all the way as far as China. This unwelcomed phenomenon has been more pronounced with our main trading partners.  The resulting shortages in goods supply in the market did not escape our attention.

“On the demand side, a dramatic and sudden loss of demand and revenue for SMEs severely affected their ability to function and caused severe liquidity shortages. Additionally, consumers experienced loss of income, fear of contagion and heightened uncertainty, which in turn reduced spending and consumption. In other words, there is fear all round and the outlook to many people does not look too rosy for them,” said Dlamini.

Despite the reopening of the economy, albeit partially,  Dlamini said there was still a clear need for COVID-19 impact mitigation measures. Some of these include adopting other emergency measures that will address immediate liquidity challenges, reduce layoffs and avoid business closures and bankruptcies.

“These measures have to be implemented side by side with reforms that are aimed at correcting the pre-COVID-19 economic slump. It is only then can we address post-COVID-19 recovery drive recovery in the levels of production and employment and set the foundations for longer term private sector led growth. 

“What we know for sure, and which is not nice to hear, is that some businesses will shut down and there will be loss of employment. The sooner we accept that reality the better we can start planning for the future,” he said. 

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