Common Market for Eastern Africa (COMESA) has sent an appeal to investment banks to support the struggling African Small and Medium Enterprises (SMEs) with access to finance.
Mr. Sindiso Ngwenya Secretary General for COMESA noted that success of most projects for SMEs can be realised if SMEs gets guarantee funding from finance institutions.
When addressing the Malawi Investment Forum (MIF) held in the Capital city, Lilongwe, Ngwenya said though the region is fortunate in having financial institutions that are providing funding, SME business projects are failing to get financed in commercial banks. He said SME’s can’t access to money in the commercial banks without guarantees which is a major set back.
Ngwenya therefore asked Overseers Private Investment Corporation (OPIC) Vice President and Chief Executive Officer to consider extending their financing programmes on guarantee fund for SMEs
While appealing for OPIC to consider put guarantee fund for SMEs and work together with the regional grouping Ngwenya said highlighted that "without guarantee funding" some of the important projects like those that may begin in Malawi "will not be able to get financing.”
Responding to the request James Polan, Overseers Private Investment Corporation (OPIC) Vice President, Small and Medium Enterprise Finance said “We are in fact working now in East Africa Loan Guarantee Fund for SMEs whereby we will be able to provide guarantees to Malawi and other banks so that they can extend credits to SMEs without personal guarantees required.”
The OPIC vice president expressed readiness to support the investors in Africa and urged them to research their investment choices with diligence, articulate then said OPIC will be ready to help financing them.
As well, the Eastern and Southern African Trade and Development Bank (PTA Bank) President and Chief Executive Officer for PTA Bank Mr. Admassu Tadesse when speaking at the MIF, pledged strong support available investment opportunities in Malawi.
“We would like to strengthen our partnerships not just with investees here but also our co-financing partners such as African Development Bank and African Financing Corporation. We have strong indication and capability at PTA Bank. So we have very strong appetite still for Malawi, we are open for business we are practical and we try to pride our serves on being dynamic and faster than other most multilaterals. This can also be advantages for entrepreneurs who understand the value of time and efficiency.”
However, both OPIC and the PTA Bank emphasized the need for conducive environment for doing business.
The OPIC vice president, Mr. Polan, emphasized by urging Malawi government that “It’s absolutely essential for government to ensure regulatory processes are streamlined” to fully attract investors and make them stay. He also recommended that there is need to open to new entrance and have a predictable and transparent tax regulatory investment regime which is written and understandable.
On other note, the PTA Bank President and CEO, Tadesse hailed government of Malawi for showing resilience bouncing back from impact of floods and food crisis and resolutely deal with macro-economic challenges and creating a more predictable and more enabling business environment.
“We have seen that inflationary pressures which were difficult are now moderating. And we have seen how Kwacha has stabilized. Indeed government is on the path of fiscal consolidation and this should put downward pressure on inflation and interest rate in the medium term.”
