27 Jul 2022

There is need to create a conducive environment in the financial services sector to align with government processes to create sustainable enterprises.

Speaking during a workshop organised for procurement officers from government departments in Tsabong on Tuesday, Absa Bank enterprise, business development manager, Ms Bakang Tshwene said for the economy to grow there was  need to boost Small Medium and Micro Enterprises (SMMEs).

Ms Tshwene said raising millionaires and big multinational conglomerates should start with supporting business incubation of SMMEs hence procurement managers had been urged to focus on growth of the sector.

She said it was important to design banking products that facilitated SMMEs to make it easy for them to penetrate the market.

To this end, she said, Absa bank offered short term working capital to SMMEs to pay suppliers upfront and directly to enable them to deliver service.

This development, she said, offered a non-traditional way of landing where 30 SMMEs had been funded since 2017.

The bank, she said, had trained about 1 500 SMMEs nationwide to improve their performance, adding that in the past the bank did not approve processing of purchase orders from SMMEs, which included procurement and supply of food items.

Ms Tshwene said the bank had changed its stance and was now open to facilitating SMMEs who were in the food business.

Nowadays, when an SMME approach them for financial assistance after winning a tender, they pay directly to the supplier to avoid misuse of funds, she said. The expectation was that the issuer should sign a ‘Deed of session’ which included an Absa controlled account and the money would go through the client’s account and be paid directly to the purchase order from the SMMEs account, she said.

Thus, she encouraged procurement managers to support SMMEs and come up with a flexible purchase order tailor made to facilitate development of such a sector. She said SMMEs must be encouraged to avail all necessary documents and ensure their financial records were up to date at all times so that they were assisted timely without delay.

Furthermore, Ms Tshwene emphasised the need to impart financial literacy on SMMEs to ensure sustainable growth.

On other issues, Ms Tshwene said SMMEs and all banking clients must get ready for a new development in the banking sector as Bank of Botswana had scraped off use of cheque books, “soon banks will no longer use them. SMMEs to be encouraged to embrace digitization,” she said.

For her part, Companies and Intellectual Property Authority (CIPA) communications manager, Ms Marietta Magashula drilled procurement officers on companies and business registration act.

She encouraged them to adopt new ways of doing business, use online digital platforms and refrain from asking for too many documents from bidders during tendering process.

“We want to become a paperless society, there is no need for companies to submit CIPA documents to you, you may simply log on our website and check companies statuses whether they are registered or deregistered as per the laws of Botswana,” she said.

She warned that if they did not check before awarding tenders, they might find that the company that had won had been deregistered due to failure to comply to Botswana laws by CIPA and that might stall the tendering process and timely service delivery.

Ms Magashula emphasised the need to use digital platforms which were highly resourceful for the reason that a citizen owned company which had bided for a government tender could change to the hands of a foreigner in matter of minutes therefore it was important for them to constantly check such details online before awarding tenders.  ENDS