LEA hamstrung by funding shortages
Brian Benza | Thursday July 30, 2015 12:00
Briefing editors forum in Gaborone yesterday, Matome says in spite of the funding gap, LEA registered and trained 102 Small and Medium Enterprises (SME) in the year upto March 2015 against a target of 41.
In the period, 4,995 micro enterprises were registered against a target of 1,760.
LEA categorises micro businesses as those with a turnover under P300,000 per annum. Businesses grossing revenue above P300,000 per year are classified as SMEs. “In the 2014-2015 financial year, which was the first of our three year strategy, we received an avalanche of applicants from clients and this was mainly due to opening up to all sectors of the economy unlike in the past when we only concentrated on four sub-sectors,” he says.
In the period, a total of 1,445 jobs were created, 317 of them directly through LEA interventions, with a total investment value of P206.9 million against a target of P85.5 million. Although LEA managed to surpass all of its targets, Matome believes that the Authority can achieve more if more funds were to be availed.
“In the current financial year, we had a set budget of P200 million, but we were only allocated P147 million. Although this was an improvement from the P134 million in the previous year, the P53 million funding gap constraints our operations, as we are now only able to visit our clients about four times a year.
“Ideally, we would have wanted to interact with them about 12 times per annum. “Funding constraints have also hindered us from attracting, retaining and training the right talent. We have been experiencing high staff turnover as our remuneration packages are not that attractive,” he says. Although LEA says it has managed to achieve a success rate of between 72 percent to 76 percent, its clients are still swamped by numerous regulatory and market-related challenges, which continue to restrict their growth.
Among some of the challenges faced by LEA clients include unavailability of land, market access and funding.
According to Deputy CEO Client Services, Cosmas Moapare apart from evidence of lack of commitment by some entrepreneurs, it also takes a long time for micro businesses to access land, while regulatory issue such as Environment Impact Assessment (EIA) have proved to be deterrent for growth.
“New business start-ups, especially in the tourism sector have complained of the exorbitant costs of conducting EIAs, while funding has also been problematic as most financial institutions prefer to finance businesses that are already existing. “For those already in operation, entrepreneurs talk of the inability to penetrate the market as their greatest challenges either due to inadequate production capacity or quality certification,” says Moapare.
LEA, which was established by an act of Parliament, is mandated with providing entrepreneurial and SMME development interventions. Among the interventions that LEA provides to clients are business development services such as screening, business planning facilitation, training and mentoring.