LEA study pinpoints SMMEs greatest challenge :: Mmegi Online

The Local Enterprise Authority (LEA) has found that while local Small, Medium and Micro Enterprises (SMMEs) are saddled with a wide array of challenges, all of them are linked to a lack of appealing finance options from lenders and investors.

According to an SMME handbook developed by LEA, the lack of finance options for the different stages of the organisations’ development in Botswana is widening the finance gap in the local market.

The finance gap refers to the gulf between the funding options availed to SMMES and their actual needs. According to the handbook, Botswana’s finance gap as a percentage of Gross Domestic Product (GDP) stands at 18.55% ranking the country third amongst SADC states. Local finance institutions have traditionally taken a very conservative approach when it comes to lending to SMMEs, citing a lack of bankable collateral and the inability to monitor SMMEs operations.

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