By Phiwa Sikhondze
The newly launched National MSME Policy has placed a strong emphasis on transforming Eswatini’s entrepreneurial landscape, but the Minister of Commerce, Industry, and Trade, Manqoba Khumalo, has highlighted a critical factor often overlooked—social capital.
Social capital refers to the trust, relationships, and networks that enable individuals and businesses to work together effectively. According to the Minister, in countries where MSMEs thrive, a strong culture of financial discipline is ingrained from an early age.
Speaking at the launch of the National MSME Policy, the Minister argued that while access to finance remains a challenge, the real issue hindering MSME growth is the lack of a strong culture of financial responsibility and accountability among entrepreneurs.
During his address, the Minister challenged the prevailing notion that MSMEs struggle primarily due to limited access to financial resources. He instead pointed to weak social capital as the underlying barrier preventing sustainable business growth.
“We talk about the fact that the problem is access to finance. I want to redefine the problem. The problem is social capital. When you give me money and I say to you I’ll give it back, in a certain way, it becomes optional whether I do so or not—even for businesses,” he remarked.
He illustrated the issue with a scenario where business owners, after receiving payments for services rendered, often divert funds for personal use instead of honoring their financial obligations. This behavior, he suggested, undermines trust within the financial system and discourages lenders from supporting MSMEs.
“In those jurisdictions where MSMEs are successful, the culture is embedded from childhood—to say if you owe someone, you’d rather sell what you have and pay them back, rather than take chances and see how far you can go without honoring your obligations,” he stated.
This principle, he noted, is crucial for businesses that rely on credit, supplier agreements, and government-funded initiatives such as the Youth Empowerment Revolving Fund.
Khumalo said the failure to repay loans, even those offered at concessional rates, leads to the collapse of funding programs that were designed to support small businesses.
The Minister emphasized that the government has introduced multiple financing schemes for MSMEs, but uptake remains lower than expected. The lack of a repayment culture not only affects business growth but also limits the effectiveness of financial support programs.
“We’ve got many funds, but my discomfort is that uptake in all of these funds is not near what we would want to see as government,” he noted.
He called on financial institutions, business associations, and entrepreneurs themselves to foster a culture of accountability and trust. By strengthening social capital, the MSME sector can gain better access to financing and build sustainable enterprises that contribute to the economy.
To address this challenge, the Minister urged financial institutions and policymakers to integrate social capital principles into their lending frameworks.
He also called on the Centre for Financial Inclusion to champion financial literacy programs that instill responsible borrowing and repayment habits among entrepreneurs.
“Social capital is one of the things that I would like the Centre for Financial Inclusion to embrace in its agenda. It’s a simple thing that says when I say give me E50, I will give it to you at the end of February. I’ll do it,” he said.
For entrepreneurs, the message was clear: honoring financial commitments is not just a moral obligation but a key determinant of long-term business success. By cultivating trust and accountability, MSMEs can access more funding opportunities, strengthen supplier relationships, and play a more meaningful role in Eswatini’s economic growth.