We Are More Interested In Business Viability Than Collateral – IDCE

By Phesheya Mkhonta

The Industrial Development Company of Eswatini (IDCE) says that when considering funding for a business they are more interested in the viability of the business than whether the business or founder has enough collateral.

This was disclosed by IDCE’s Business Development Manager Mthunzi Dlamini during the Vusumnotfo Expo 2023 which was held at the Tums Waterworld Hotel.

The Manager said it is a misconception that small and medium enterprises (SMEs) only receive funding if they have collateral.

Dlamini noted that when they look at financing SMEs they consider a number of factors such as the business’s ability to generate healthy cash flow. He said cash flow is so important because it enables the business to pay back the loan and interest levied on the loan.

“We have had instances where SMEs that have collateral or equity come to us seeking funding and when we examine the business case we realize that it is not viable, hence we end up not proving that finance, so it is not about collateral or equity only, but the viability of the business,” he noted.

He added that in actual fact they want to give out more funding but they are facing a major challenge because most of the business funding applications aren’t viable enough for them.

“I am challenging entrepreneurs and SMEs today to come up with business plans that are more compelling and viable so that we consider them for funding. As it stands the money that has been allocated this financial year to provide finance to businesses in the country will not be fully utilized, which is a shame as we are all aware that SMEs play a major role in any economy.”

Dlamini also urged SMEs and entrepreneurs not to run away from financiers when they come across repayment challenges.

“I urge SMEs to come to us when they have repayment or general financial challenges instead of running away because it aggravates the problem. It is better if we understand your challenge as it enables us to see where we can meet each other halfway. Running away can lead to you being blacklisted, yet in certain cases that can be avoided.”

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