THE Lesotho National Development Corporation (LNDC) has called on the private sector to take advantage of its financing products to promote private sector-led economic growth and diversification.
The corporation last Friday kicked off district road shows in Leribe to showcase the available financing options that entrepreneurs can exploit, while also promoting investment opportunities they can consider.
The four financing options were launched by Prime Minister Moeketsi Majoro in August this year. Worth M410 million, the four include the revamped Partial Credit Guarantee (Covid-19 Response PCG). The other three are the quasi equity, project preparation facility and equity finance.
They are administered under the LNDC’s development finance business unit.
The national campaign will eventually reach all 10 districts. The campaign also saw the training of participating financial institutions to enable them to administer the schemes.
Addressing the Leribe business community last Friday, LNDC chief executive officer Mohato Seleke said the financing instruments were meant to fulfill the government’s economic policy.
“The government wants a private sector-led economy and economic diversification,” Mr Seleke said.
“We need to increase our production in terms of industrial output and also in terms of market destination.
“These government policy aspirations have been entrusted to the LNDC to fulfill.
“Our plan was to diversify Lesotho’s production base as per the government’s priority areas that include agriculture. So, we first restructured the LNDC to do this effectively because it had shortcomings.”
He said for the past 50 years, the LNDC has concentrated on garment manufacturing but this changed in 2017 when the corporation restructured to comprise of three business units namely; property development and management unit; development finance unit and investment and trade promotion unit.
Mr Seleke said the development finance unit is meant to build financial products to help the private sector to easily have access to credit finance at the bank.
“And for the first time ever, now the private sector can come directly to the LNDC to request business financing instead of the bank.”
He said the investment promotion unit is concerned with attracting both domestic and foreign investment.
For his part, Trade and Industry minister Thabiso Molapo said while Covid-19 has negatively affected business, it has presented the country with an opportunity to improve domestic investment.
“The government have directed the LNDC to see to it that the M410 million is used to build domestic entrepreneurs.
“Agriculture is one sectors to be financed. We must take advantage of these financing options and start self-production and not wait to buy everything.
“Right now, we import simple things like cabbages, potatoes and onions yet we have the water and the land. Why can’t we produce these things by ourselves?” Dr Molapo said.
He said the government would soon open a fresh produce market for local producers.
While the government remains the largest employer, the private sector can help change the statusquo through partnering the government in initiatives like the LNDC’s financing options, he said.
Dr Molapo added that parliament would soon pass laws that enhance entrepreneurs’ access to finance.
The participating banks, Standard Lesotho Bank (SLB), First National Bank (FNB), Nedbank and PostBank said improving the Covid-19 response PCG from offering 50 percent to 75 percent collateral would enable them to lend money to businesses because of the reduced risk.
They however, warned that accessing a loan would depend on the bankability of the business proposal and not necessarily on the loan security.