By Kefiloe Kajane
The Basotho Enterprises Development Corporation (BEDCO) and Enygma Ventures this week signed a Memorandum of Understand (MOU) aimed at ensuring that Basotho Micro, Small and Medium Enterprises (MSMEs) have access to funding through non-traditional means, namely venture capital.
Enygma Ventures is an American based venture capital company with operations in South Africa. The main objective of the collaboration is to assist MSMEs access funding in the form of Venture Capital with each party playing a distinct role to enable this.
According to a statement issued by the corporation, the primary basis of the 2021/25 BEDCO strategy is the government of Lesotho ’s National Strategic Development Plan (NSDP) II and the MSME policy. That is where the strategy particularly draws from the first Key Priority Area of the NSDP II, ‘Enhancing Inclusive and Sustainable Economic Growth and Private Sector Job Creation’.
The statement adds that the strategy recognises the significant role that entrepreneurship plays in the achievement of the NSDP II and therefore aims to provide a more focused approach to the development of Basotho enterprises, based on the NSDP’s identified priority areas.
“The MSME sector is crucial to the development and sustainability of the Lesotho economy. In most countries they contribute about 70 percent towards job creation. Lesotho MSMEs are however faced with numerous challenges that inhibit their growth and impact. Access to finance and capital has been identified as one of the biggest constraints to that these MSMEs are faced with.
“As the government of Lesotho agency mandated to grow and promote Basotho enterprises, particularly MSMEs, BEDCO has made concerted efforts to assist in addressing some of the access to finance problems. These efforts include exploring the use of non-traditional financing methods one of which includes venture capital. This involves engaging with Venture Capital firms to finance Basotho MSMEs,” it said.
It explained that Enygma Ventures is one of the first Venture Capital companies identified for collaboration to finance local MSMEs. Enygma Ventures is a venture capital fund focused on investing in female entrepreneurs and women founders, focused on Southern Africa or SADC region.
“The US-based fund is a unique purpose-driven investment fund, aimed at empowering, mentoring, and capitalizing outstanding female entrepreneurs in the region. BEDCO’s primary role in the collaboration is to mobilize and support MSME business proposals preparations and investor readiness. BEDCO will support MSMEs with business proposal development taking into consideration the specific requirements of Enygma Ventures. This will be done through organizing linkage platforms as a way for investors to meet with MSMEs.
“BEDCO also will support MSMEs post funding with adherence to requirements as set out in the funding agreements through various interventions which include business coaching, funds management support and incubation,” the statement read.
