The United Nations Development Program (UNDP) has entered into a partnership with six financial institutions in Botswana to advance access to finance for local small and medium enterprises (SMEs) under the Supplier Development Programme (SDP).
Speaking during the signing of the Memorandum of Understanding (MOU) between the UNDP and the financial institutions in Gaborone on Tuesday, Jacinta Barrins, UNDP Resident Representative, said as the UNDP realized that lacking of access to finance is one key business challenge faced by SMEs.
Lack of collateral or security, poor business plans, low financial literacy and the lack of financial records are some of the key factors which hinder SMEs’ ability to raise capital. UNDP recognized the difficulties faced by small businesses in their attempts to apply for loans, lines of credit and expansion capital through traditional banking.
The UNDP-SDP approached commercial banks and national financial institutions to provide access to holistic finance packages, tailored towards the needs of SMEs, that will provide investment and credit facilities at discounted rates, said Barrins.
The SDP program brings together three partners in a tripartite partnership (Buyers, Suppliers and Consultants) which is unique in Botswana. The partnership involves large regional and local firms (Buyers) with local small to medium businesses (Suppliers) and UNDP trained consultants.
The partnership aims to encourage buyers who are currently importing products to supply the Botswana market to buy from local suppliers. And also, the partnerships which focus on access to finance will support the Supplier SMEs to grow and expand their businesses, building their resilience and, in turn, increasing their ability to create jobs and contribute to Botswana’s economic development.
For his part, Stanbic Bank Chief Executive Officer Samuel Minta encouraged large corporates to make room for procurement and buy from small businesses to help them grow to a level of quality. He also stressed that large corporations should pay SMEs on time.
The six financial institutions include Stanbic Bank, ABSA Botswana, Bank Gaborone, Standard Chartered Bank, Citizen
Entrepreneurial Development Agency and the National Development Bank. Enditem