FINCORP Has Disbursed Over E7.8 Million under the Small Scale Enterprise Loan Guarantee Scheme

FINCORP Group Brand Development & Communications Officer Manqoba Makhubu reveals that they started offering financial support under the Small Enterprise Loan Guarantee (SELGS) in 2022, and a total of seventeen businesses (17) from different sectors have already benefitted. In an interview with this publication, he discloses that they look forward to assisting more SMEs currently applying for this loan facility.

Q: The Credit Guarantee Scheme administered by the Central Bank of Eswatini (CBE) comprises the Export Credit Guarantee Scheme (ECGS) and Small Enterprise Loan Guarantee (SELGS). As a development financier and partner in this initiative does FINCORP provide finance under both schemes?

A: We provide finance under the Small-Scale Enterprise Loan Guarantee Scheme (SSELGS). We began lending under this facility in February 2022 under a new product “Sisekelo” which was added to the already existing SME loan products that include; working capital, order finance, asset lease finance, line of credit, long-term contract finance, business acquisition on Title Deed Land, and agricultural loans.

We should emphasize that this loan facility is considered only for SMEs who present viable projects but have a shortage or lack of other acceptable collateral for credit. It provides up to 95% guarantee for start-ups and 85% for already existing businesses.

This means that qualifying SMEs can now access much larger loans worth up to E1 million from FINCORP via the Central Bank of Eswatini (CBE) Small Scale Loan Guarantee Scheme and repay them over a longer period of five years. The repayment frequency could be monthly, quarterly, bi-annual, or annually depending on the pattern of the borrowing business’ cash flow. 

Q: Are there businesses operating in particular sectors that you focus on regarding financing, or you are open to financing all sectors?

A: Remember, whatever we do at FINCORP is informed by our mandate which is to empower Eswatini citizens through the provision of meaningful access to credit, job creation, and poverty alleviation. Hence, we provide access to financial services across all economic sectors which make a meaningful contribution to economic growth.

We assist MSMEs both in Eswatini Nation Land (ENL) and Title Deed Land (TDL). A significant proportion of our loan book represents agribusiness activities mostly situated in rural areas. Other major sectors include haulage, forestry, and general business covering trade, retail, manufacturing, construction, and services. 

Q: How many businesses have benefitted from the SSELGS under FINCORP?

A: As mentioned above, we began lending under the SSELGS facility in February 2022. As of December 31, 2022, we had referred at least 18 businesses to the SSELGS and 17 of these were assisted and their total loan amounts amounted to about E7.8 million. We should emphasize once more that this loan facility is considered only for SMEs who present viable projects but lack acceptable collateral for credit.  

Q: What challenges have you come across as you provide finance to Swati businesses on this initiative?

A: Since we started last year to provide finance to businesses under the SSELGS initiative with businesses that have different patterns of cash flow, it would be premature at this stage to come up with conclusive observations.

But there are general challenges that could also apply under this initiative.  For instance, while access to finance remains at the heart of what we do, achieving the ideal repayment rate on advanced facilities is not an easy task.  

That is why we continue to enhance our loan monitoring to reduce the borrower’s chances of not paying back their loans and help them to enhance their businesses. We also acknowledge the fact that some of our MSMEs may not be natural entrepreneurs and therefore there exists a need to handhold them in their business journey to ensure success. The Business Development Unit (BDS), therefore, has been established to meet this need.

Nonetheless, we remain committed to what we stand for, ‘Helping Emaswati to Help Themselves.’

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