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King wants business advisory councils

Business Section

By Teetee Zwane - SWAZI OBSERVER-23-Jul-2010

HIS Majesty King Mswati III has called for the establishment of a business advisory body that would assist aspiring entrepreneurs formulate good business plans, for instance.

The King said there was a lack of trust between the banking sector and aspiring business people, an issue that needed to be addressed if the country was to achieve first world status.

“Banks have no confidence in aspiring business people that is why they find it difficult to finance them. We need to close the gap between these sectors if we are to achieve first world status because if we do not, this dream shall be elusive to us,” he said on Tuesday during the Smart Partnership National Dialogue at Mavuso Exhibition and Trade Centre. “We need to establish a body that will evaluate business plans presented to banks for finance and assist the business people where necessary to raise the level of confidence financial institutions have on the business community.”

challenges

His Majesty said this would go a long way in addressing the challenges regarding access to finance as he believed that Swazis had a lot of ideas for viable business ventures, whether small or large, in various spectrums of the economy, including tourism and opportunities that would come with the opening of Sikhuphe International Airport.

“Our economy has all along been developed by foreign investors. My dream is to see Swazis venturing into businesses that will see them realising turnover above E10 million not just around E10 000,” he said.

Central Bank of Swaziland Governor Martin Dlamini reiterated His Majesty’s call, saying the establishment of business advisory councils could be one possible policy intervention towards achieving investment and economic growth in the country. He said there was indeed a need for the establishment of business advisory councils that would assist business people with business management skills.

Dlamini noted that there was a tendency of believing that money was the solution for the success of any business venture, which he said was a fallacy. “There is a need for the development of entrepreneur skills, the avoidance of negative perceptions about embarking in certain business ventures, planning and education. These factors play a major role in business development. The banks will then be called upon to underpin entrepreneur skills through financing,” he added.

The governor said the role of government in growing the private sector should focus on capital projects empowering local businesses such that when the business community sought financial sector, financing these applications could be accepted as bankable. Meanwhile, Dlamini said last month the minister of commerce, industry and trade met banks’ MDs to discuss the negative perceptions that financial institutions reneged on promises made some years ago with regards to financing businesses.

funding

He said it was concluded that banks would want to play an active role in the financing of small and medium enterprises (SMEs) through the existing guarantee funding scheme at the Central Bank.

“Before the banks commit to the scheme there will be a need to review it and to remove its administration from the Central Bank to an institution that will promote and closely administer it,” he added. The governor said the Bank was also looking at promotion of second-tier banking that focuses on SME financing. He said the Bank was looking towards close cooperation with service providers such as savings and credit cooperative societies as well as other deposit taking institutions to be classified as second-tier financial institutions as these assisted in financing micro-projects.

“We need to empower these organisations through access to the savings chanelled to them, but there’s a need for prudential requirements which can be taken care of through the Financial Services Act,” said Dlamini.


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