Firm engages SMEs on business financing

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usiness Partners International Malawi says it is ready to support viable local small and medium enterprises (SMEs) with financing ranging from K100 million to K1 billion to boost their businesses.

Speaking during a product demonstration breakfast in Blantyre on Wednesday, the firm’s country manager Akuzike Kafwamba said as a risk financier, their funding model is based on viability and entrepreneurial ability.

He said: “We are coming from turbulent economic environment that disturbed businesses and people. Access to finance is a big issue we are trying to address.

“We do not look at collateral as a decision factor for our investments, but it comes in as something that manages the financial risks.”

Kafwamba said they only provide lending and align the cash flow of business to the repayments of the funding.

In the 10 years that the firm has been operating in Malawi, he said they have dusbursed about K15 billion to local businesses.

Speaking separately, one of the SMEs owners Vera Banda said in the eight years she has been in business, access to capital has been a challenge.

She said: “As a result, my businesses have not grown to the levels that I have wanted to be.

“We hope that with such financiers targeting small businesses like mine, we can grow and thrive on the market.”

Small and Medium Enterprises Development Institute lamented what it called prohibitive conditions by financial institutions on credit access, adding that access to finance remains top on the list of bottlenecks for SMEs.

A recent Reserve Bank of Malawi Financial Stability Report stated that loan standards and conditions in Malawi are tight, making credit expensive or unreachable for some with many turning to expensive and strict borrowing conditions by commercial banks.

Results of the survey show that six out of eight banks reported that they maintained tight credit standards and conditions for approval of loans while two banks indicated that they had tightened further the standards and conditions for approval of loans.

The stance by the commercial banks was partly attributed to uncertainty in the operating environment following inflationary pressures from unstable exchange rate and the Russia-Ukraine war.