Thousands of MSMEs get FInES support
At least 44 677 Micro Small and Medium Enterprises (MSMEs) have gotten financing support worth about $53.8 million (about K53.8 billion using the old exchange rate) through the Financial Inclusion and Entrepreneurship Scaling (FInES) Project.
The FInES project, a World Bank-supported project, is aimed at increasing access to financial services and promoting entrepreneurship capabilities of MSMEs in Malawi including addressing Covid-19 implications.
In an e-mailed response, FInES project manager Ralph Tseka said so far, the central bank has disbursed 89.7 percent of the $60 million funds that were made available through the project.
According to the project plan, out of the $60 million, $47 million was planned for disbursement through RBM’s participating financial institutions and $13 million through the Malawi Agricultural and Industrial Investment Corporation.
In terms of distribution, 38 percent of the loans disbursed to women-owned MSMES while 15 percent was disbursed to youth-owned MSMES against targeted benchmarks of 40 percent and 20 percent for women-owned and youth-owned MSMEs, respectively.
Tseka further said that 307 participants out of the 1426 entrepreneurs that were recruited into the FInES business management and entrepreneurship training have graduated from the first phase of the capacity-building exercise, representing 21.53 percent.
He said the capacity building exercise, which has three phases—personal initiative skills, business management skills, access to finance and access to market skills—is designed to improve the MSMEs chances of securing loans.
He said: “We recognise that most MSMEs do not get funding because they can’t produce business development projects. So, if we train them, it will put them in a better position to get funding from, including from private financiers. Those who want to get funding within the project will be allowed to do so.”
In a separate interview published in a FInES brief, Kaluso Nyimba, a participant in the FInES capacity building programme, said she was impressed with the practical knowledge and solutions she gained from the training.
She said: “It is not just theory. They are giving me practical tools that I can use right now to turbocharge and unlock my business potential. I am already implementing the changes and I am seeing tangible results.”
In a separate interview, HCI paints managing director Daddy Msasata said the low-interest loans that he got through the programme helped him access better technology and reach out to a wider market.
He said: “The progress is clear in the bottom line. Before I got the loan, I was making about K2 million in sales every month. After getting the equipment and accessing a bigger segment of the market, I can make up to K12 million in sales.”
FInES loans are offered at 11 percent per annum in commercial banks and four percent per month at microloan institutions. In contrast, consumer loans are offered at around 35 percent per annum in commercial banks and five percent per annum at micro-loan institutions.
