Times Of Swaziland: MSMES REMAIN HIGH CREDIT RISKY

MSMES REMAIN HIGH CREDIT RISKY
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Nhlanganiso Mkhonta on 28/11/2024 12:28:00


EZULWINI – EswatiniBank Managing Director Nozizwe Mulela says as banks they
are cognisant of the fact that the local MSMEs sector struggles to access
finance to grow.
Mulela said this was mainly due to requirements placed by the financial
institutions for the micro, small and medium enterprises (MSMEs) to access
finance. Mulela said MSMEs are high credit risk making it hard for them as
financial institutions to offer funding to them without doing due diligence. She
said MSMEs often lack sound collateral, which is one of the requirements for
funding.
Recover
She said it is unfortunate that inasmuchas the requirements may be hard for the
MSMEs but they have to be put in place and followed because, at the end of the
day, the financers have to recover the money offered to MSMEs as loans. Mulela
said nonetheless, there are solutions available to this challenge. She said
government has provided credit guarantee schemes to assist in this regard. She
said as a bank they use the same assets they fund as collateral.