Ministry of Finance, commercial banks - SMEs will soon know of procedures to access R25,000 of seed funds |20 February 2017

Individuals who want to start a small business will soon be informed of the process to follow before they can access the R25,000 as seed money as announced by President Danny Faure in his State-of-the-nation address.

The Minister for Finance, Trade and Economic Planning, Dr Peter Larose, has said the measure is a way to encourage small businesses to undertake all the preliminary procedures like registration fees, business plan, legal advice, among other matters.

Minister Larose, who was speaking during a press conference on Friday, noted that to reach the sum of R25,000 it considers reasonable, his ministry has relied on information gathered from the Development Bank of Seychelles (DBS) as well as the Small Business Financing Agency (SBFA).

He said the DBS, which is responsible to manage and disburse the money, will work closely with the SBFA and they will have in place all the necessary mechanisms and procedures to ensure there is no abuse, as well as an effective monitoring system to ensure the businesses really take off.

He said individuals presenting themselves for the seed capital will need to fill an application form, submit a clear and authentic business plan, give details of all expenses to be carried out using the money being applied for before a committee assesses their requests and subsequently decide on allocation.

Following allocation of this start-up capital, the small businesses can then proceed to submit their projects to any commercial bank with which Minister Larose confirmed government has already finalised an agreement for them to fund the commercial activities of the small businesses under concessional terms.

Asked about the rigorous preconditions usually set by commercial banks before any funds could be allocated to any business big or small, Minister Larose said all these have been addressed under the agreement the government has had with the banks.

“Through the agreement we have had with them, we expect the banks to honour their commitment and maintain the terms of their agreement with government and failure to do so will lead to the Central Bank and the Ministry of Finance, Trade and Economic Planning to take appropriate action against them,” Minister Larose said.

But in view of some bad experiences small businesses have had with the SBFA and the DBS, what guarantee do they have that now things would run smoothly for them?

Minister Larose reassured that what has taken place in the past will not happen again as the two institutions are being reorganised and will have in place a Small Medium Enterprise Desk office to specifically handle such matters.

He added that at present there are no specific figures of the number of SMEs that have succeeded through support from these two institutions or how many have been turned away.

He stressed that this is a new departure and fresh start lessons have been learnt through past experiences and that his ministry will ensure that both the DBS and the SBFA submit a weekly report on the SMEs’ activities namely progress and challenges.

In order to ensure sustainability of the initiative as well as come up with more sustainable others for SMEs, Minister Larose stated that the government is also in talks with telecommunications and insurance companies to offer special rates and premiums respectively to SMEs.

Minister Larose also said his ministry will soon be meeting SMEs to know more about their concerns and challenges and explore ways to better help them.