Executive Chairman of IPP Limited Dr Reginald Mengi
The call was made on Thursday in Dar es Salaam by the Executive Chairman of IPP Limited Dr Reginald Mengi, who was the guest of honour at the launching of SME Impact Fund (SIF)in Tanzania.
SIF is an initiative of the Match Maker Group and is managed by Match Maker Fund Management Limited.
He said: “SMEs need discipline”: Borrow wisely to grow your businesses, spend wisely and repay loans and save wisely in order to sustain your businesses.
He added that is the wisdom of prosperity and the secrete of making their entrepreneurial dream come true.
Dr Mengi,who is also the Chairman of Tanzania Private Sector Foundation (TPSF) said SMEs in particular need relevant business support services to make their dream come true.
“This calls for innovative approaches in making access to finance and non financial services possible for emerging SMEs to grow their business and thrive” , he said
Dr Mengi believe that the SME Imapct Fund is one of those innovative and timely interventions in Tanzania in the wake of the resolve of agricultural commercialization through Kilimo Kwanza and other public and private sector programmes currently in place.
He explained that the Fund will focus on SMEs in the “missing middle” bracket. “ These are SMEs that are in agricultural value addition and are either too big for microfinance programmes or too small for the formal financial institutions to handle”, he noted.
The TPSF chairman said , he was informed that the feasibility study conducted by Match Maker Group before prior to establishing of the Fund , found that the missing middle gap is apparent in Tanzania.
According to him this was confirmed at the Investment Forums all over Tanzania that were attended by SME Impact Fund last year.
He said around 150 SMEs were given the opportunity to present themselves to a range of financial institutions and over 80 percent of them were eager to meet SME Impact Fund.
SME Impact Fund has packaged loans ranging from 100m/- to 1bn/- to be repaid in the short, medium and long term period accompanied with state of the art business advisory services.
However Dr Mengi said SMEs in agricultural value chains are faced with great challenges of formalizing their businesses.
“Some are first time borrowers hence lack experience to manage their businesses professionally, Iam told that the SME Impact Fund package of services strives to support these businesses in their formalization process and this is an innovation that formal financial institutions do not concern them selves with”, he said.
Dr Mengi said he fully support the idea that besides providing finance to grow the businesses of SMEs , there is a need to assist the entrepreneur to increase insights into their own businesses.
He stated that TPSF has been supporting SME development under the World Bank funded Private Sector Competitive Project (PSCP) from 2006 to 2013.
It has supported over 10,000 SMEs in business formalization, a basic requirement for accessing financing.
He said it has also boosted and built the foundation for entrepreneurship and business management nation wide through its three core programmes including Cluster Competitive Programme (CCP) Matching Grants Programme (MGP) and Business Development Gateway (BDG)
He commended Match Maker Group (MMG) for taking up the daring step in establishing the fund and wish success in its growth and creation of the Impact which is also the dream of those behind it.
For his part, the Managing partner of MMG Henri Van Der Land, said Match Maker Fund Management Ltd (MMFM) was registered in 2011 with the mission of empowering emerging businesses in Africa; to grow with effective impact in their value chain by delivering advisory and financial services in an innovative and entrepreneurial manner.
The ‘SME Impact Fund’ is registered in the Netherlands where MMFM is contracted to take care of the business interests of the ‘SME Impact Fund’ in Tanzania.
“The idea of the ‘SME Impact Fund’ was born because in our consultancy practice we were frequently meeting SME’s; who were frustrated that they could not acquire finance to grow their business.
We realized there’s a big economic and social impact lost, as these entrepreneurs were not able to realize their business dream. And so we decided to develop a service that would address their needs in registering the MMFM ltd…” he explained
So far the SIF has already provided 9 loans since July 2013 amounting to around EUR 650,000.
At the launch some of the SME’s were present and they shared their business profiles and testimonies via small video presentations that were aired at the event on monitor screens.
All the SME’s in the portfolio are from Tanzania and have shown sustainable production technologies across the agribusiness value chains they’re involved in. Plus the SIF targets only chains that meet the minimum sustainability requirements set in the Funds Social, Economic and Environmental Checklist ("SEEC").
SIF projects that in the next 10 years, they shall have financed over 150 SMEs, creating at least 1,000 additional jobs, increased income for approximately 50,000 small holder farmers using good and sustainable agricultural practices among the beneficiaries.Also, the investors may anticipate a fair return and their capital back at the end of the 10 years lifetime of the Fund.
Earlier, the chairlady of SIF Investment Committee, Betty Semainda, said the MMFM team is further developing its pipe line and SMEs are assisted to become investment ready.
She said the next investment committee meeting is planned for October this year and around 5 new cases will be reviewed by them.
Speaking, one of the SME who has benefited with the SIF , identified as Leopold Eben , the Managing Director of Mwanza Quality Wine , thanked the MMG for the support .He said for the past one year, he has doubled production and sales.
He urged Tanzanians to create a culture of buying locally produced goods in order to increase livelihoods and income to the government .
Another entrepreneur Sebastian Msola, from Kibaigwa Grain Millers in Dodoma said since took loan from the Fund he has changed the way of doing business.
“I have installed new computers for recording business transactions, hire a competent accountant hence my business has improved tremendously”, he boasted.
SOURCE:
THE GUARDIAN
Thanks IPP chairman. Your one of the top 10 intelligence Tanzanian
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