6.3 Supporting institutions
6.3.5 Ease of access to finance
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“We offer both pre-establishment and post-establishment training programmes.
Internal trainers at SEDA are well trained, and if there is a need, SEDA outsource trainers who will provide relevant training” (Intervener 2, in-depth interview, 2015).
The Municipality’s clients are provided with both pre and post establishment training programmes, by the supporting institutions with which the Municipality links SMMEs. The Municipality makes sure that SMMEs are linked with well-trained established stakeholders to train the SMMEs (Intervener 1a, in-depth interview, 2015).
Absa links SMMEs with well-trained trainers who provide such SMMEs with both pre and post- establishment training (Intervener 2b, in-depth interview, 2015). In addition, DEDTEA invites SEDA to offer the pre and post-establishment training programmes. These outsourced facilitators are well trained to focus on the DEDTEA target market (Intervener 2c, in-depth interview, 2015).
Furthermore, BSC does not provide training, therefore, section D is not applicable. The PCB refers SMMEs to SEDA concerning the pre-establishment training (Intervener 2d, in-depth interview, 2015). The Chamber only does the post-establishment training as it deals with already existing businesses. The interviewee proved that PCB trainers are well trained (Intervener 2e, in- depth interview, 2015).
93 There is one office for SMME Support Network-Lesotho, and it is based in Maseru the capital city (Intervener 1a, in-depth interview, 2015). The Lesotho Post Bank has thirteen branches countrywide, meaning in ten districts of Lesotho. Their offices are based both in cities and rural areas (Intervener 1b, in-depth interview, 2015). There is one Chamber office in the city of Maseru (Intervener 1c, in-depth interview, 2015). There is a MTICM headquarters office in Maseru, and branches in all the other nine districts of Lesotho (Intervener 1d, in-depth interview, 2015). At the moment, PSFL has only one office in Maseru, however, they are planning to expand to all the districts of Lesotho (Intervener 1e, in-depth interview, 2015).
On the other hand, in Pietermaritzburg, there are institutions that provide funding to SMMEs, and there are some supporting institutions that do not offer funds to SMMEs, but are in a position of linking SMMEs’ owner-managers with the financial institutions. It is perceived that it is because these supporting institutions have realised the importance of financing SMMEs.
In Pietermaritzburg, SEDA has one office in the city of Pietermaritzburg (Intervener 2, in-depth interview, 2015). The Municipality has many offices in both cities and townships (Intervener 2a, in-depth interview, 2015). Absa has an office dealing with SMMEs in each region. Absa offices are in cities (Intervener 2b, in-depth interview, 2015).
The interviewee from DEDTEA, said:
“There is DEDTEA office in every eleven districts of KwaZulu-Natal. The offices are situated in cities, however, the department visits rural areas to make SMMEs aware of the services DEDTEA offers” (Intervener 2c, in-depth interview, 2015).
The Business Support Centre and the Chamber, each has one office in the city of Pietermaritzburg (Interveners 2d and 2e, in-depth interview, 2015).
6.3.5.2 Qualification and procedures to access funds
Research question 5 of this study is also answered by this sub-section. To qualify for the services provided by the financial institutions in both study sites, one has to be either a registered member or a willing entrepreneur.
In Maseru, BEDCO provides soft loans to MSMEs’ owners, however, there is a shortage of funds at the moment to achieve their goal. The interviewee from BEDCO said:
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“An application for any entrepreneur who needs BEDCO’s assistance is supported, and entrepreneurs are linked with the other providers where we cannot assist.
Entrepreneurs apply, attach their business plan and submit their applications in order for them to access funding services from BEDCO” (Intervener 1, in-depth interview, 2015).
The interviewee of SMME Support Network-Lesotho stated that entrepreneurs who have enough funds to pay for SMME Support Network-Lesotho services are the ones who qualify for services provided. There are no funds offered, however, to access SMME Support Network-Lesotho services, entrepreneurs can come individually or in a group. Entrepreneurs register for training, so when the number is appropriate, the organisation continues with the training (Intervener 1a, in-depth interview, 2015).
Entrepreneurs come in for consultation, then the Lesotho Post Bank gives them the requirements’
list. If the entrepreneur satisfies all the requirements, then he is considered qualified. The appointment is set with the qualified entrepreneur, where all the necessary documents are produced, then such an entrepreneur is assisted. The Lesotho Post Bank is continuously assisting MSMEs with funds from start-up to growth phases. However, most entrepreneurs still rely on their personal savings (Intervener 1b, in-depth interview, 2015). For one to qualify for the Chamber’s services, one has to register as a member. The Chamber does not provide funds, MSMEs are only linked with the appropriate financial institutions (Intervener 1c, in-depth interview, 2015).
The Ministry of Trade does not offer funding to MSMEs. However, businesses that have been operating for at least one year, are referred to LEAP if they need financial assistance. For MSMEs to access these funds, they have to be one year old and prove that their businesses are growing (Intervener 1d, in-depth interview, 2015). To access PSFL services, one has to be a PSFL member who has registered with the Law office. Funds are not provided, however, MSMEs are referred to the relevant financial institutions after a thorough assessment of their business plans (Intervener 1e, in-depth interview, 2015).
On the other hand, in Pietermaritzburg, any SEDA member who needs funding assistance is referred to the appropriate financial institution.
“Any SEDA member who needs assistance with provision of funds, is normally referred to the appropriate financial institutions, as we offer no funds. There are no
95 procedures to follow for such entrepreneurs as SEDA does not offer funds”
(Intervener 2, in-depth interview, 2015).
The Municipality claimed that anyone who is willing and capable of starting a business, qualifies for the services that the Municipality offers. Still with funding, the Municipality does not provide any funds, however, SMMEs are linked with relevant financial institutions (Intervener 2a, in- depth interview, 2015).
Absa validated that anyone who is willing to start a business qualifies for Absa services. Such SMMEs first register with Absa, then they are assisted with any kind of assistance they need (Intervener 2b, in-depth interview, 2015). The interviewee from DEDTEA asserted that everyone who is willing to start a business qualifies for DEDTEA services. The needs of the SMMEs are firstly assessed, then they are referred to the relevant financial institutions (Intervener 2c, in-depth interview, 2015). The BSC emphasised that there is no criteria used and no procedure to follow, therefore any SMME qualifies for BSC services. However, the BSC does not provide funds (Intervener 2d, in-depth interview, 2015). On the other hand, to qualify for PCB services, the entrepreneur has to join as a member and be active in business. The Chamber is not an avenue for funding, therefore, SMMEs are referred to SEDA or BSC which will link them with the relevant financial institutions (Intervener 2e, in-depth interview, 2015).