By Likeleli Monyamane
Compliments of the new year to all readers of this column. In 2022 we will be shifting gears by transforming this column into a business education column meant to provide commentary on developments in the business and entrepreneurship space from a female perspective.
It is no secret that the Lesotho economy has experienced many challenges in the past few years. Particularly, Basotho businesses have faced several challenges commonly experienced by companies worldwide due to the dreaded Covid-19 pandemic. Some of these challenges led to the closure of businesses due to an inability to recover from movement restrictions and lockdowns aimed at curbing the spread of Covid19. Other challenges were more unique to Basotho businesses as they faced the increased cost of doing business due to being land-locked within South Africa and supply chain issues and a decline in household income resulting in less household spending.
However, there have also been a lot of positive initiatives that have taken place in 2021 that was aimed at supporting and advancing entrepreneurs and SMMEs in Lesotho. This week, we would like to highlight and recognize some of these initiatives and celebrate various stakeholders’ roles in ensuring that the business sector does not fall to pieces.
Covid-19 Relief Support
Standard Lesotho Bank’s Covid19 Entrepreneur Support Competition launched in 2020 disbursed funds to entrepreneurs in 2021, in which capital grants were provided to 11 finalists out of 182 applicants.
The year also started with FNB Lesotho launching a business competition to award money to boost businesses affected by Covid-19. The competition was open to businesses with a minimum of three years in operation, a clear track record, three employees, and an annual turnover of more than M2 million. Ten of these businesses were awarded M100,000 thousand each, and then ten more businesses were provided professional services support as part of the competition.
The informal sector was some of the businesses negatively affected by Covid-19 and the lockdowns imposed to contain its spread. Alliance Insurance Company decided to provide capital funding to help 2,000 street vendors buy inventory to recover from the lockdowns. The company invested M800,000 towards this initiative.
The Government of Lesotho launched the Private Sector Covid-19 Relief Fund through the Lesotho Enterprise Assistance Programme (LEAP), in which M50 million was allocated to the fund. So far, M20 million has been released to the Ministry of Trade and M7.5 million disbursed to 772 formal sector businesses and 6,478 informal sector businesses.
Access to market
The i-mall was launched during the annual Entrepreneurship Expo hosted by The Entrepreneurship Network. The i-mall is an online platform that provides SMMEs with a virtual stall and enables them to reach local and international markets. The i-mall hosted 150 SMMEs and showcased them at the Dubai 2020 expo. This initiative was supported by Standard Lesotho Bank, The Entrepreneurs Network, and the Lesotho Chamber of Commerce and Industry (LCCI).
Vodacom Lesotho launched the #SmallBizSpotlight initiative, which aimed to profile SMMEs and give them coverage on all of Vodacom Lesotho’s media platforms. Additionally, businesses were given three months of internet connectivity and videography support.
Access to finance and capacity building
The Lesotho National Development Corporation (LNDC) has continued to support the Partial Credit Guarantee Scheme to Lesotho-registered businesses. In 2021 it provided M50 million partial guarantee to businesses seeking funding from the financial services sector in Lesotho. The scheme guarantees 50% – 75% of the loan amount.
Standard Lesotho Bank (SLB) invested M400,000 towards the local supply development initiative in collaboration with the United Nations Development Programme (UNDP). Additionally, SLB launched the Khalala program, a localized version of the former lioness of Africa program. This entrepreneurship and networking program aims to support women entrepreneurs in Lesotho and ensure an increase in women’s participation in the business sector.
In 2021, the Basotho Enterprise Development Corporation (BEDCO), the Lesotho Revenue Authority (LRA), and the Ministry of Trade signed a memorandum of understanding to formalize their collaboration to increase the formalization of businesses in Lesotho. Furthermore, BEDCO launched the following programs that are supported by the African Development Bank
- Firstly, the Business Plan Competition was launched towards the end of 2021, which will be targeted at awarding fifty (50) entrepreneurs with M100,000 prize money each. The program will also equip participants with business skills and incubation services.
- The BEDCO Capacity Building Program is targeted at reaching 1300 businesses in the key National Strategic Development Plan (NSDP) II sectors (technology, manufacturing, agriculture, tourism, and creative industries) and the renewable energy sectors.
Based on all the above initiatives, much has been done to advance entrepreneurship in Lesotho. We will look forward to seeing the fruits of some of these initiatives in 2022 and a continuation of others, and hopefully, even see the launch of new ones in other areas where entrepreneurs face challenges.
