Chi­nese bank tar­gets SMES

Lesotho Times - - Business - Bereng Mpaki

SMALL to medium en­trepreneurs (SMES) in Le­sotho have re­ceived a shot in the arm from the Chi­nese De­vel­op­ment Bank (CDB) which availed a multi-mil­lion dol­lar loan fa­cil­ity to en­able them to fi­nance their busi­ness op­er­a­tions.

The loan is set to ben­e­fit sec­tors such as agri­cul­ture, agro-pro­cess­ing, man­u­fac­tur­ing, en­ergy con­ser­va­tion, en­vi­ron­men­tal pro­tec­tion, lo­gis­tics and trade.

CDB representative Ran Sha yes­ter­day an­nounced the ini­tia­tive in Maseru dur­ing a cer­e­mony that was at­tended by mem­bers of the busi­ness com­mu­nity, se­nior gov­ern­ment and Chi­nese of­fi­cials.

Ms Sha said the fa­cil­ity, known as the Spe­cial Loan for De­vel­op­ment of African SMES, was part of the wider China-africa bi­lat­eral re­la­tions aimed at as­sist­ing African coun­tries to over­come chal­lenges of en­ter­prise de­vel­op­ment.

She said the ini­tia­tive, which was es­tab­lished in 2009 and al­ready op­er­a­tional in many African states, falls un­der the Fo­rum on China Africa Co­op­er­a­tion (FOCAC).

“The Spe­cial Loan for the De­vel­op­ment of African SME’S was es­tab­lished as one of the eight new mea­sures an­nounced by the Chi­nese gov­ern­ment, with the in­ten­tion to ease the fi­nanc­ing bot­tle­necks be­tween China and African coun­tries,” Ms Sha said, adding the loan would be ac­ces­si­ble to lo­cal com­pa­nies and Chi­nese-funded com­pa­nies or joint ven­tures be­tween the two.

“The spe­cial loan will meet var­i­ous fi­nanc­ing needs of SMES, which can be ei­ther used to sup­port the cap­i­tal ex­pen­di­ture or work­ing cap­i­tal,” she said, adding that the in­ter­est rate for the loan would take the form of a float­ing or fixed rate.

Al­though the finer is­sues on the op­er­a­tional­i­sa­tion of the loan in Le­sotho are still to be fi­nalised, the stan­dard min­i­mum loan amount in other coun­tries is US$ 2 mil­lion over a pe­riod not ex­ceed­ing five years.

Small Busi­ness De­vel­op­ment Min­is­ter Se­libe Mo­choboroane wel­comed the de­vel­op­ment, say­ing it would help grow the coun­try’s econ­omy.

“There is an un­der­stand­ing that we are poor be­cause there is noth­ing that has been done in the SME sec­tor. We should ap­ply our minds and do all we can to en­sure that we help our small and medium busi­ness en­ter­prises, I want to as­sure you that there is a po­ten­tial in that sec­tor,” Mr Mo­choboroane said.

He said the e sec­tor had suf­fered from the fail­ure to ac­cessss credit fa­cil­i­ties.

“I do not know now why but it be­comes very dif­fi­cult for our com­mer­cial banks anks to ex­tend a help­ing hand to our small and medium en­ter­prises.prises.

“But with the he com­ing of the CDB fa­cil­ity, we strongly be­lieve that this s chal­lenge we have been fac­ing ing for quite a long time will l be ad­dressed and I be­lieve that to­gether we can grow the econ­omy through this sec­tor,”ec­tor,” he said.

For his part,t, the Chi­nese Am­bas­sador to Le­sotho Sun Xianghua said id fi­nance was a cor­ner­ston­e­stone of mod­ern economies omies with­out whichch they could not thrive. He said de­spite its po­ten­tial, lack of cap­i­tal was one of the ma­jor con­straints hold­ing back Africa’s sus­tain­able de­vel­op­ment. He said the Spe­cial Loan was cru­cial to un­lock­ing Le­sotho’s en­ter­prise de­vel­op­ment ef­forts, which would re­sult in job creation and in­come gen­er­a­tion. “By now many of SME’S African coun­tries have ben­e­fited from the spe­cial loan with a huge num­ber of jobs cre­ated,” he said, adding that the to­tal fund­ing that China ex­tended to­wards the Spe­cial Loan was in­creased from US$1 Bil­lion to US$6 bil­lion in 2015.

CDB representative Ran Sha.

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