MBABANE – “We are establishing an integrated support system for effective delivery of Small Medium Enterprises (SME) support interventions locally.”
These were the words of Small Enterprises Development Company (SEDCO) CEO Khethiwe Mhlanga during the official pronouncement of the Memorandum of Understanding (MoU) with the Eswatini Stock Exchange (ESE).
The MoU signing ceremony partook at the SEDCO Head Office yesterday. While addressing the stakeholders that were present on the day, Mhlanga said there had always been a need for SEDCO to collaborate and coordinate efforts in carrying out both mandates and assisting the development of SME sector locally.
In this light, she noted that this would create a highly energided entrepreneurial sector that was characterised by innovative, competitive and sustainable businesses.
She said SMEs played a critical role in the economic development of the country, mainly through contributing to employment creation, poverty reduction and economic and social cohesion.
In the same light, a survey conducted by SEDCO on the impact of COVID19 on SMEs locally indicated that financial liquidity was reported to be the major challenge to most SMEs due to loss of income.
According to a FINSCOPE survey (FMT, 2017), it found that 60 per cent of the respondents mentioned access to finance as the primary constraint for SME start ups while 49 per cent reported sourcing finance as the most significant operational constraint. Furthermore, about 25 per cent of established SMEs reported that sourcing finance was a major bottleneck for growth in their businesses.
Mhlanga went on to say, “The Eswatini Stock Exchange provides an opportunity for businesses to raise capital for their normal operations as well as longterm projects. It offers a platform where entrepreneurs have access to the multitude of investors seeking viable investment instruments, thereby addressing the long-standing issue of affordable access to finance for SMEs. This is another avenue to diversify access to finance for SMEs.”
She concluded by saying it was her strong belief that the official signing ceremony signified the start of a meaningful collaboration and looked forward to furthering SEDCO’s engagements in developing programmes that would support small businesses to survive this period thus contributing to the economy of the country.
Meanwhile, ESE CEO Ncamiso Ntjalintjali said it was comforting to note that as ESE, they had come a long way in trying to package what the market wants as it was the market which brought together businesses. This includes businesses which need financing and those in need of assets and vehicles to invest in.
“The partnership with SEDCO gives us the belief that it is still attainable for ESE to demonstrate even to the smallest in our economy that they have got a large space to play in,” he said.
The CEO also said there could be initiatives that smaller entities could bring themselves into special purpose acquisition vehicles and have more investors that could play their part in supporting that.
“The ESE clearly provides for that and we are quite excited in creating those vehicles. The future of this country lies in the health of our SME’s and we do need to capacitate and create an enabling environment for them to thrive and this collaboration will indeed achieve that,” he said.