Gaborone, Botswana, July 13th 2021 – UNDP has entered into partnership with selected Banks in Botswana, in an effort to prioritize access to funding for small and medium enterprises (SMEs) through the UNDP Business Supplier Development Programme (SDP). The partnerships were signed into action at the UNDP & Banks Partnerships - Memorandum of Understanding (MOU) Signing Ceremony event, which took place on Tuesday 13th July 2021 in Gaborone.
MOU’s were signed between UNDP and six financial institutions which include: Stanbic Bank, ABSA Botswana, Bank Gaborone, Standard Chartered Bank, Citizen Entrepreneurial Development Agency (CEDA) and the National Development Bank (NDB). The ceremony was attended by senior management representatives from each bank and other UNDP-SDP partners, including:
• Ms. Jacinta Barrins, Resident Representative – UNDP Botswana
• Mr. Oabile Mabusa, Chief Executive Officer – Bankers Association of Botswana
• Mr. Charles Siwawa, Chief Executive Officer – Botswana Chamber of Mines
• Mr. Samuel Minta, Chief Executive Officer – Stanbic Botswana
• Mr. Sybrand Coetzee, Managing Director – Bank Gaborone
• Mr. Mpho Masupe, Chief Executive Officer – Standard Chartered Bank
• Mr. Thabo Thamane, Chief Executive Officer – CEDA
• Ms. Lorato Morapedi, Chief Executive Officer – National Development Bank
• Mr. Keletso Setimela, Head of Business Banking – ABSA Bank Botswana
• Ms. Masedi Letsididi, Country Coordinator for Botswana – FinMark Trust
The UNDP-SDP works to create demand-based, market-driven opportunities for SMEs to increase their competitiveness through the innovative Suppliers Development Methodology (SDM), while connecting essential small-scale producers/suppliers to larger markets locally as well as abroad.
The programme is in its second year of implementation and ‘access to finance’ is one of the key business challenges listed by SMEs on the programme thus far. Lack of collateral or security, poor business plans, low financial literacy and the lack of financial records are some of the key factors which hinder an SMEs ability to raise capital. UNDP recognizes the difficulties faced by small businesses in their attempts to apply for loans, lines of credit and expansion capital through traditional banking. As such, the UNDP-SDP approached the commercial banks and national financial institutions to provide access to holistic finance packages, tailored towards the needs of SMEs, that will provide investment and credit facilities to at discounted rates.
In her welcome remarks, the UNDP Resident Representative, Ms. Jacinta Barrins presented that the partnerships with the banks were a pivotal piece to the puzzle UNDP was looking to solve in its efforts to support SMEs in Botswana. The UNDP-SDP, she noted, works to provide SMEs with access to markets, access to knowledge and access to finance - which will be advanced through the just signed MOU’s.
Project Manager for the UNDP-SDP, Ms. Boitumelo Mbaakanyi lauded the banks for supporting the UNDP’s efforts to grow the SME economy in Botswana. She highlighted that the Banks were bringing much to the table in the form of: preferential lending rates; innovative funding mechanisms; projections-based cashflow funding vs. historical financials; SME-friendly credit facilities; credit guarantees. Finally she encouraged the banks to “develop robust relationships with their clients even the ones who deposit fifty Pula (BWP 50) today”.
The event further served to launch a new partnership between UNDP-SDP and FinMark Trust, an organization that seeks to further financial and economic inclusion for the all of the SADC region. The Country Coordinator for FinMark Trust in Botswana, Ms. Masedi Letsididi presented that Micro, Small and Medium Enterprises (MSMEs) are essential for economic development and are expected to be key drivers of sustainable growth in Africa. As such, FinMark Trust has done significant work on MSME scoping in Botswana, Eswatini and Lesotho in an effort to get to understand their form and character. This she said will produce data that will be critical in designing the suitable form of funding for MSMEs.
The UNDP-SDP provides training and support that cultivates growth within SMEs to a level where they can be considered bankable, meeting the requirements of commercial banks and national financial institutions. The partnerships with financial institutions will go further to guarantee that the Suppliers will always have an audience with the banks and financial institutions, as the limiting barriers to entry are lifted. The partnerships will extend beyond the provision of loans and credit, as the financial institutions have also extended the additional offerings of savings accounts, SME employee accounts, financial literacy trainings/workshops, as well as bank-led mentorship and business development programmes to the SDP Suppliers, providing for a holistic package for the SMEs.
The advancement of partnerships which focus on access to finance will support the Supplier SMEs to grow and expand their businesses, building their resilience and in turn, increasing their ability to create jobs and contribute to Botswana’s economic development.
About the UNDP-SDP:
The UNDP-SDP brings together 3 partners a tripartite partnership (Buyers, Suppliers and Consultants) which is unique in Botswana. The partnership involves large regional and local firms (Buyers) with local small to medium businesses (Suppliers) and UNDP trained consultants. The aim of the partnership is to encourage the Buyers who are currently importing products to supply the Botswana market to buy from local suppliers. UNDP has trained local consultants in a specific designed SDP course about running small to medium businesses that has been rolled out in many countries in South America and Asia. These consultants work with the Suppliers and mentor them for a period of 10 to 12 months to assist them to meet the standards required by the Buyers for local and regional markets.
The SDP programme is focused on the following sectors: Mining, Agro-Processing, Projects (Infrastructure), Leather, Textiles, Health, Digital and Other manufacturing. This creates jobs and diversifies the economy, while reducing poverty and inequality.
For more information and media interviews, contact:
Lebogang Tlhaloso, UNDP Communications Associate - Tel: +267 363 3745; | Mobile: +267 71 686 682; Email: email@example.com
Bame Modungwa, Project Officer – SDP - Tel: +267 363 3700; | Mobile: +267 74793355; | Email: Bame.Modungwa@undp.org.