UNDP comes to the aid of SMEs
United Nations Development Programme ( UNDP) has offered financial assistance to Small Medium Enterprises in Botswana through its Business Supplier Development Programme ( UNDP- SDP).
The UNDP- SDP works to create demandbased, market- driven opportunities for SMEs to increase their competitiveness through the innovative Suppliers Development Methodology ( SDM), while connecting essential small- scale producers/ suppliers to larger markets locally as well as abroad. The organisation has signed Memorandum of Understanding with six financial institutions which consist of Stanbic Bank, Absa Bank Botswana, Bank Gaborone, Standard Chartered Bank, Citizen Entrepreneurial Development Agency ( CEDA) and the National Development Bank ( NDB). Speaking during the signing ceremony yesterday, UNDP Resident Representative, Jacinta Barrins said partnerships with the banks were a pivotal piece to the puzzle that UNDP was looking to solve in its efforts to support SMEs in Botswana. “UNDP- SDP works to provide SMEs with access to markets, access to knowledge and access to finance - which will be advanced through the just signed MOU’s.” Barrins said the programme is in its second year of implementation. Access to finance is one of the key business challenges listed by SMEs on the programme. Among the key factors limiting success of SME businesses is lack of collateral or security, poor business plans, low financial literacy and lack of financial records. She said UNDP recognizes the difficulties faced by small businesses in their attempts to apply for loans, lines of credit and expansion capital through traditional banking. “As such, the UNDP- SDP approached the commercial banks and national financial institutions to provide access to holistic finance packages, tailored towards the needs of SMEs, which will provide investment and credit facilities at discounted rates.” UNDP- SDP Project Manager, Boitumelo Mbaakanyi highlighted that banks were bringing much to the table in the form of preferential lending rates, innovative funding mechanisms, projections- based cash flow funding, SME- friendly credit facilities and credit guarantees. “I urge all the banks to develop robust relationships with their clients, even the ones who deposit P50 per day.”