The Senior Manager of Business Incubation at the Small Enterprises Development Company (SEDCO), Skhumbuzo Mbuyisa, has revealed that despite being available for years, local businesses have not taken advantage of the Export Credit Guarantee Scheme (ECGS).
Mbuyisa disclosed this at the MTN Eswatini Q2 Business Connect Session Seminar at Mountain Inn in Mbabane yesterday. The session, titled “Position Your Business for Trade and Export,” explored international trade and export opportunities for local businesses.
Speakers included Claudia Castellanos of Black Mamba Foods, MTN Eswatini CEO Wandile Mtshali, and Mbuyisa.
During the session, Mbuyisa confirmed that the ECGS, under the Ministry of Commerce, Industry and Trade, and administered by the Central Bank of Eswatini, has recorded zero uptake to date.
“As we approach the end of June, I can confirm that the scheme has recorded zero uptake, though it was established specifically to support businesses exporting to other countries,” he said.
“Despite government-backed financing and years of awareness campaigns, not a single local entrepreneur has accessed the ECGS. This raises concerns about market access, trust, and export-readiness among local SMEs.”
The scheme, which operates through the formal banking system, aims to de-risk exports by assuring commercial banks that their funds will not be lost in case of borrower default.
It is important to note that development financiers in the country also provide finance under the scheme.
Under this model, the guarantee covers a significant portion of the loan, providing a safety net for both lender and borrower.
The ECGS was designed to encourage banks and development financiers to lend to exporters, especially small and medium enterprises (SMEs) lacking sufficient collateral or export history. Mbuyisa encouraged businesspeople to export their goods, especially given the kingdom’s small population.
“It is meant to finance pre-shipment costs such as raw materials, inputs, and packaging, as well as post-shipment activities like logistics and invoice financing,” he said. “
The scheme guarantees up to 90% of the loan, leaving banks with minimal risk.”
However, as Mbuyisa noted, banks still view these transactions as too risky, and entrepreneurs often lack the knowledge or paperwork to access the funds. He added that part of the problem relates to bureaucracy and technical demands associated with exporting.
“Local entrepreneurs often struggle with product certification, export documentation, regulatory compliance, and financial record keeping,” he said.
“Although the Scheme is designed to eliminate collateral concerns, banks remain cautious. “Banks always say the funding is there, but the issue is collateral and trust. The banks are scared. Even though the scheme says they won’t lose money, they’re still reluctant,” he stated.
He stressed the need for entrepreneurs to improve social and communication skills, noting that many banks fund individuals, not just businesses. “We need to work on building credibility with lenders. Right now, trust is a big barrier,” he concluded.