Credit guar­an­tee funds 128 busi­nesses

Lesotho Times - - Business - Retha­bile Pitso

THE gov­ern­ment has as­sisted 128 busi­nesses to ac­cess loans from banks through its Par­tial Credit Guar­an­tee Fund (PCGF).

This was dis­closed by the Min­istry of Fi­nance’s Di­rec­tor of Plan­ning Unit Habo­fa­noe Makopela last week dur­ing a meet­ing for gov­ern­ment min­istries meant to take stock of the progress made in the im­ple­men­ta­tion of the 2012/132017/18 Na­tional Strate­gic De­vel­op­ment Plan.

Mr Makopela said of the 128 Ba­sotho-owned busi­nesses that had ben­e­fited, 19 had al­ready re­paid their loans. The gov­ern­ment set aside M50 mil­lion as a guar­an­tee for banks in the event ben­e­fi­cia­ries fail to set­tle their loans un­der the scheme.

“PSGF was es­tab­lished by the gov­ern­ment in 2011, and be­gan op­er­a­tions the fol­low­ing year. To date, 128 busi­nesses have ben­e­fited from the scheme and 19 have al­ready set­tled their loans,” he said.

“The due date for pay­ment of the loans is de­pen­dent on the agree­ment be­tween the ben­e­fi­cia­ries and banks.

“The date for the 19 who have al­ready paid was due, and there could be oth­ers who are al­ready in the process of re­pay­ing since their pay­ment dates have not yet lapsed.”

Mr Makopela said the gov­ern­ment had in­creased the risk-shar­ing ra­tio from 50 to 70 per­cent after ob­serv­ing that banks were still re­luc­tant to as­sist bud­ding en­trepreneurs who did not have the re­quired se­cu­rity.

“The gov­ern­ment de­cided to of­fer 70 per­cent se­cu­rity after it came to our at­ten­tion that banks were hes­i­tant to pro­vide credit to start-ups. So, tak­ing a higher-risk shar­ing ra­tio was meant to in­crease the chances of ap­pli­cants to ac­cess credit.”

He said Ba­sotho had many mis­con­cep­tions about the scheme.

“Many peo­ple er­ro­neously think the scheme is a gov­ern­ment grant which pro­vides start-ups with cap­i­tal. It is ac­tu­ally a guar­an­tee fund paid up to banks in the event a ben­e­fi­ciary fails to pay their loan,” said Mr Makopela.

“To as­sist en­trepreneurs ac­cess the se­cu­rity, the gov­ern­ment has set up a co­or­di­nat­ing unit which of­fers in­for­ma­tion about the scheme. The of­fice is lo­cated in Maseru near Vic­to­ria Ho­tel.”

Min­istry of Fi­nance’s Di­rec­tor of Plan­ning unit Habo­fa­noe Makopela.

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