Post Bank, Small Businesses Ministry sign MOU

MASERU – Access to finance is the biggest stumbling block standing between success and failure for small businesses.
But thanks to a Memorandum of Understanding deal inked between Lesotho Post Bank and the Ministry of Small Businesses last Friday, small businesses will now have ready access to finance.

Speaking at the signing ceremony last week, Lesotho Post Bank chief executive, Molefi Leqhaoe, said they want to help small businesses thrive.
Leqhaoe said the biggest challenge facing small businesses is lack of access to finance.
That is mainly because most of the businesses do not have collateral even when the banks are willing to offer loans.

The MOU between the bank and the Small Businesses Development Ministry is meant to solve the issue of lack of collateral.
Leqhaoe said small businesses, which are the majority, are not banked because “banks only use top 20 percent of the customers, what’s happening to the rest of customers who make 80 percent?”

Leqhaoe said they are “expecting businesses to be there for job creation”.
“We have confidence that small businesses have the potential to grow, hence we are going to help them, but they must be faithful to pay the bank,” he said.

“There’s no relationship between entrepreneurs and banks and we are here to close that gap,” he said.
Speaking at the same occasion, the Lesotho Chamber of Commerce and Industry (LCCI) executive secretary, Fako Hakane, said it is important for small and medium enterprises to access loans easily if they are to create jobs.

Hakane said small and medium businesses are the backbone of the economy in every country hence the need to support them.
Small Businesses Development Minister Chalane Phori said the ministry has set aside M10 million to develop small businesses countrywide during this financial year.

He also said he is working hard to ensure that all government ministries pay for goods and services to suppliers on time “so that small businesses can grow”. He said failure to pay suppliers on time has a knock-on effect as it results in small businesses failing to pay banks.
The end result is that banks will stop supporting small businesses.

Phori said they will “do everything in our power as the ministry to encourage establishment of businesses”.
For the small businesses to grow, “we need to buy local products because they are produced by these small businesses”.
Phori said small “entrepreneurs should learn to make savings for them to acquire bank loans”.

Staff Reporter