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LOANS DISBURSED BY FINCORP REACH E6.5BN

13/04/2023 13:14:00 Mhlengi Magongo

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MBABANE - Total loans disbursed by the Eswatini Development Finance Corporation (FINCORP) have reached E6.5 billion from inception to date.

These loans have been extended to over 80 000 beneficiaries who support just above 15 000 jobs and contribute about E1.5 billion to gross domestic product (GDP). This is according to the company’s 2021/22 annual report. FINCORP first opened its doors to the public in April 1996 through Legal Notice No.16 of 1996 promulgated under the Finance & Audit Act No.18 of 1967 with a clear mandate of delivering access to credit for small and medium enterprises (SMEs) particularly those at the grassroots level. The company’s main deliverables are access to finance, job creation, and poverty alleviation.

The company has two shareholders namely the Government of Eswatini and Tibiyo Taka Ngwane, holding 80 per cent and 20 per cent respectively. In the year 2022, the FINCORP Group loan portfolio reached a total of E1.4 billion, a level which has been sustained in the last three years notwithstanding the volatile and fragile operating environment. The group’s E1.4 billion total loan portfolio is made up of First Finance’s E940.1 million gross loan portfolio and FINCORP’s E447 million portfolio. FINCORP’s loan portfolio is spread across general-purpose finance, sugar cane farming, heavy haulage, public transport, supermarket, construction, and other agricultural and business activities.

In the report, FINCORP Group Managing Director Dumisani Msibi disclosed that the latent effects of COVID-19 on business performance and market disruptions caused by the changing domestic operating environment manifested during the 2022 financial year, as lending operations showed a significant stagnation maintaining the same level of E1.4 billion in portfolio size for two consecutive years since 2020. “Total new annual loan approvals slightly surged upwards from E976.6 million recorded in the previous year to E1.020 billion in the year under review, but was set off by loan repayments received during the year. Most new loan approvals were generated through existing clients, who were expanding or refinancing their operations,” he said. Meanwhile FINCORP’s posted a profit after tax of E5.8 million. Minister of Finance Neal Rijkenberg commended FINCORP’s resilience amid the unpredictable operating environment.

Disbursements

“Statistics show that FINCORP has, to a reasonable extent, fulfilled its mandate judging by the cumulative loan disbursements of E6.5 billion to more than 80 000 beneficiaries from inception while just above 15 000 jobs are being supported by businesses financed by the organisation,” he said. The minister said FINCORP continues to be one of the state organs through which the government seeks to empower its citizens to actively participate in mainstream economic activities across various sectors. He appreciated all the stakeholders who continue to partner with FINCORP on several fronts, particularly the local and international funding organisations including the African Development Bank (AfDB), the European Investment Bank (EIB), and Norsad Finance. “I also wish to pay a special tribute to local funding partners comprising banks, asset managers, pension funds, and the corporate sector for availing funding through the Eswatini Stock Exchange (ESE). As a major shareholder, the Government of Eswatini commits to supporting FINCORP in reaching out to the multitudes of MSMEs, which will lead to massive job creation and economic development throughout the Kingdom,” he said.

Tibiyo Taka Ngwane Managing Director Dr. Absalom Themba Dlamini also commended FINCORP for achieving significant institutional growth over the years as demonstrated by its increased outreach through the decentralisation of operations to remote geographical locations in the country, coupled with the expansion of its products offering to include general purpose finance and insurance products. “The organisation must without fail maintain focus on financing micro, small, and medium enterprises across the length and breadth of the country, particularly those in rural areas that represent more than 70 per cent of the population,” he said.

Dlamini also said there is a strong compelling case for FINCORP to direct its focus to the youth population as it represents a significant section of the country’s population, yet it largely remains unemployed. “The recent advent of COVID-19 has elevated to center stage the need to pay particular attention to the sustainability of organisations at all levels. Therefore, FINCORP must focus on safeguarding the continued existence of all the enterprises that it has financed by offering mentorship, knowledge transfer, and technical support. While quantitative financial results are equally important, we urge FINCORP to focus more on economic and social impacts to accelerate the kingdom’s efforts towards achieving the global Sustainable Development Goals (SDGs) and Agenda 2063,” he said.