Principal Secretary in the Ministry of Finance Jacob Mazalale has indicated that the government is contemplating crafting another Financial Inclusion and Entrepreneurship Scaling (FInES) project, to continue aiding small and medium scale entrepreneurs with cheap and patient capital.
This follows a nationwide tour of some of the beneficiaries of the projects who indicate that there is need for the programme to continue offering such kind of financing.
Mazalale said the government understands that one of the shortest ways in which the country will grow is to further improve the engagement of the private sector.
“The government is excited to encourage indigenous business community to participate in economic activity and one of the sure ways of making that is to make capital available to the private sector. The government is talking of a development bank, of which conversations are taking place, and we hope that more and more of such similar facilities as the FInES project will be made available and that the private sector will keep benefiting.
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“So, we should expect a successor project, but I want to add that it will not only be the FInES, there will also be other facilities put in place to encourage the private sector to participate and lead in the growth efforts of the country,” Mazalale said.
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FInES Project Manager Ralph Tseka said there is a huge need for a successor project as most entrepreneurs are actually crying for more funds for more investment.
“These funds were actually provided to boost the small-scale businesses from the effects of Covid and after the effects, what has actually transpired is that they are now on a level that they are actually producing, now they want really to fly. It is at this level that they need more capital.
“There were two issues on this front. When we requested for additional financing, we were looking at issues of the existing loan being extended with the same terms. The other option is that what the Minister of Finance is looking at is that we can have FInES 1 come to an end, then we can build on FInES 2. What is going to happen is that maybe the structure is going to change, the objectives will change because now that we have lifted these businesses, we are now looking at actually businesses that will be mostly in production,” Tseka said.
One of the beneficiaries of the project, who is also managing director of Hartfield Investment Harrison Longwe, said the project has been essential in the context that it helps to sustain businesses and improve their capacity.
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“Most businesses in Malawi are largely incapacitated in terms of working capital. So having a successor project helps us to enhance our working capital. When you go to the normal banks, the loans are very exorbitant. So not many businesses would be able to afford such kind of loans. But with the FInES affordability, in terms of the interest rates, it helps to cushion our cash flows,” Longwe said.
