Thursday 2019-02-21

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SIDC, YOUTH ENTERPRISE REVOLVING FUND SIGN MOU

By Majaha Nkonyane | 2018-10-14

THE Swaziland Industrial Development Company’s (SIDC) scientific business model captivated the Youth Enterprise Revolving Fund’s (YERF) attention so much so that the two entities have since signed a Memorandum of Understanding (MoU).

Speaking during the signing, YERF Fund Manager Bhekizwe Maziya said: “The use of an intermediary was not just a subjective decision taken by the board, it was informed by a scientific business model that was developed at an earlier stage. The model enables YERF to leverage on human capital, systems as well as technical expertise from the intermediary which would otherwise require huge capital outlay from the fund,” he said.

Maziya said their partnership with SIDC will not only end by SIDC providing intermediary service for the youth fund but businesses that will require loans above YERF set limits would be referred to SIDC for consideration.

Maziya also said while their concern was well justified, it was not safe for sustainability of the fund to commence lending without identifying and entering into an agreement with a financial institution to play an intermediary role.

According to Maziya, the relationship has already started yielding fruits as the fund’s management recently received training on project finance, courtesy of SIDC. “If there is one thing that has kept the YERF board of directors awake at night, it is the time it has taken the fund to issue the first loan since they resumed office since 2016,” he said.

The fund, according to Maziya, did not look out for just a financial institution but they were looking for a seasoned, well established development financial institution (DFI) that carries a similar development mandate.

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