Govt revives credit guarantee fund



CentralBank Acting Governor  Mathabo Makenete  (1)Rethabile Pitso

GOVERNMENT is set to bring back the Partial Credit Guarantee Fund (PCGF) to help small, micro and medium enterprises (SMMEs), Ministry of Finance (MOF) Executive Director for Partial Credit Guarantee Fund, Tseliso Nteso, has said.

Mr Nteso made the remarks during a seminar organised by the Central Bank of Lesotho (CBL) on Tuesday to explore ways to improve access to finance for horticulture projects.

He said PCGF, which was initially launched in 2012 to assist young entrepreneurs, would be accessed through the newly-created Small Business Development, Co-operatives and Marketing ministry.

According to Mr Nteso, PCGF would differ from other schemes in that government would offer 70 percent guarantee coverage while financial institutions would offer 30 percent to start-up businesses.

“The PCGF is set to become a driver of the economy of this country by creating employment and alleviating poverty,” he said.

Mr Nteso said entrepreneurs were expected to produce clear business ideas together with viable plans, adding that the requirements would determine the borrowing capacity of each business.

“Players in the horticulture sector will need to present workable plans to local commercial banks with whom we have a memorandum of understanding.”

Mr Nteso added that in the case of an existing business, the guarantee coverage would be 50 percent.

“Another noteworthy point is that since government is not profit-oriented, we would not be charging any guarantee fee for the applicants,” he said.

“So I challenge budding entrepreneurs to submit their proposals.”

On the sidelines of the seminar, Mr Nteso also said MOF was engaging relevant stakeholders in the industry and tourism sectors to encourage applications for the initiative.

“We have started to approach players in the tourism sector and the Lesotho Chamber of Commerce and Industry for them to assist with facilitating the scheme, but our main focus will be mainly on the Small Business Development, Co-operatives and Marketing ministry which has been mandated with assisting SMMEs since the facility was initially designed for them,” he said.

Mr Nteso further noted that since 2012, the scheme had supported 38 businesses.

“Some of the enterprises are in the transport sector and the numbers are growing,” he said.

“We have an exposure of around M8 million as of May 2015.”

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