Tibone calls for SMEs support
Seasoned businessman with a diverse business portfolio, Charles Tibone has challenged the nation to create an encouraging environment that allows small to medium scale enterprises (SMEs) to expand and prosper.
Tibone wants stakeholders to play with a full deck for SMEs to realize potential as an engine of growth.
“It is the collaborative responsibility of all stakeholders to initiate synergies that can foster such growth and development of SMEs in Botswana,” said Tibone at the Botswana Stock Exchange (BSE) Tshipidi Mentorship Programme graduation ceremony. The Tshipidi Mentorship grooms companies that could potentially raise capital, improve governance and leverage from the BSE as a springboard for growth. Tibone highlighted that focus should be placed on enhancing lending to SMEs, emphasizing need to diversify the range of financing options available to SMEs. “Traditionally, access to financing has been dominated by commercial banks, which are the major suppliers of credit to households and private businesses in Botswana.” However, Tibone wants the market to explore the potential role of capital markets in SME financing. “Avenues like the stock exchange have not been fully utilised as there remains an opportunity for access to equity market finance,” said Tibone, a former cabinet minister and technocrat. Apart from financial constraints, Tibone has bemoaned lack of ‘corporatization’ on various levels for SMEs. He said corporatization entails ensuring that all the contracts that a company is party to are on commercial terms and on arm’s length basis as well as setting up requisite corporate governance structures.
“Without adopting best business practice, SMEs in Botswana are at a risk of failing or never growing beyond SME status due to business processes’ inefficiencies, lack of transparency which may prohibit investor participation, limited execution of company strategy due to lack of oversight from governances’ structures, and so forth.” Meanwhile, BSE chairperson, Tebogo Masire said most SMEs shun listing due to lack of corporatization. “This is because, the total costs of listing are inflated by the pre-listing work. This relates particularly to the work that goes into the ‘preparation’ and ‘corporatization’ of a company ahead of submitting a listing application to the BSE,” said Masire.