BY MBONO MDLULI
MBABANE – Eswatini Development Finance Corporation (FINCORP) has reached a significant milestone by disbursing cumulative loans worth over E10 billion to more than 90 000 beneficiaries since its inception in 1996.
This remarkable achievement is highlighted in the company’s Annual Report for the 2023 financial year.
FINCORP’s portfolio diversity encompasses agribusiness; sugarcane farming, retail, manufacturing, services, logistics, public transport, construction, order finance and general-purpose finance.
According to the report, FINCORP has played a crucial role in sustaining approximately 15 000 jobs through the businesses it has financed. The company was established by His Majesty King Mswati III in November 1995 and it first opened its doors to the public in April 1996, to provide access to credit for Small and Medium Enterprises (SMEs), particularly those at the grassroots level. Its key mandate focuses on access to finance, job creation, and poverty alleviation.
Commenting on the achievement, the Group Managing Director of FINCORP, Dumisani Msibi stated: “Reaching the E10 billion milestone in loan disbursements is proof to our commitment to empowering SMEs and driving economic growth in Eswatini. We are proud to play a vital role in providing financial support to businesses across various sectors.”
The Government of Eswatini holds 80 percent shareholding in FINCORP, while Tibiyo Taka Ngwane holds 20 percent. The company’s loan portfolio reached an impressive E1.5 billion during the year under review, and it achieved the second-highest level of profitability since its inception, posting a pre-tax profit of E28.6 million, thus depicting reasonable levels of institutional and financial stability. The company’s loan approvals increased from E1.020 billion the previous year to E1.113 billion during the year under review.
Msibi said most new loan approvals were granted to existing clients, who were expanding or refinancing their existing operations. “We continued to focus on maintaining decent portfolio quality levels, carefully assessing new applications of borrowers and implementing rigorous risk management practices in the line with our enterprise-wide risk management framework given the weak economic climate resulting from recent economic downturn,” he said.
Minister of Finance Neal, Rijkenberg, commended FINCORP’s efforts in addressing the lack of access to credit for SMEs. “FINCORP remains a central pillar of strength in financing SMEs across the length and breadth of the country in several economic sectors with agribusiness having a larger share, which is a true reflection of the significantly agricultural oriented economy of Eswatini,” he said.
The Minister emphasised the Government’s commitment to ensure that the company maintains a healthy balance between debt and equity. “Government, as a shareholder, remains committed to ensuring that the organisation maintains a sustainable balance of debt to equity at all times,” stated the Minister.
Furthermore, the Minister extended his gratitude to the local and external funders who have played a crucial role in supporting FINCORP’s growth. Notable partners include the African Development Bank (AfDB), the European Investment Bank (EIB), and Norsad Capital. Additionally, he paid tribute to local funding partners, including banks, asset managers, pension funds, and the corporate sector, for their unwavering support of FINCORP.
The Minister further acknowledged the dedication and hard work of the board, management, and staff of FINCORP. “Their commitment to fulfilling the organization’s mandate has been instrumental in driving its success and positively impacting the lives of countless individuals and businesses,” he said.
FINCORP Board Chairman, Meshack Kunene appealed to the company’s clients to continue honoring their obligation to repay their loans to enable the company to continue reaching out to more citizens and fulfil its mandate of ensuring extended national financial inclusion at the grassroots level. With this significant milestone, FINCORP reaffirms its position as a trusted financial partner, dedicated to providing innovative and sustainable solutions that foster economic growth and prosperity. The level cumulative disbursements of E10.1 Billion represent the extent of outreach of the institutions to masses.
