Silence Charumbira
Lack of financial discipline is the biggest problem bedevilling Lesotho enterprises, Trade, Industry, and Business Development minister, Mokhethi Shelile has said.
Shelile said unlike the most touted perception that lack of funding was the biggest challenge, most businesses were failing because of lack of financial frugality.
He was speaking Wednesday evening during an enterprises exhibition and cocktail hosted by the entrepreneurship support organisation (ESO), Snake Nation and Khaya Holdings (SNKH), to showcase the 10 creative enterprises that have just finished a 10-months long business incubation. The incubation was initiated by the Competitiveness and Financial Inclusion (Cafi) and funded by the World Bank.
And in his keynote address, Shelile encouraged the enterprises to be thrifty with their finances and treat their operations as businesses that can sustain them and salaries.
“To you the enterprises, I beg you, when you leave here, do not play with these businesses, they are not a way to get rich, its work. Do not use funds from the business to finance your personal needs. Your business can pay your salary,” Shelile said.
“If you start paying school fees using money from the business, it is the same as eating your stock. You are killing the business. Discipline is one of the major problems that we are having, it’s not lack of funds, it’s not lack of management, it’s (in)discipline in running our businesses. It’s not even lack of support in running our businesses.
“There are businesses that graduated in the first cohort, and they are doing just fine. They’re quite disciplined and they’re going very far. They are even attracting investors.”
He urged the entrepreneurs to adjust their expectations because they will not get rich quickly.
Shelile said Lesotho’s unemployment rate was above the national average and therefore a timebomb but expressed gratitude to Cafi for the initiative that was positioning small businesses to succeed.
The entrepreneurs included a special effects make-up artist, a jeweller using recycled materials, an animator, a photo and videographer, a fashion designer and a rapper, Letlotlo, who stole the show on the night with a song released for the project earning her a M5,000 donation from Shelile.
Cafi managing director, Chaba Mokuku, told the entrepreneurs that the government was committed to supporting them as demonstrated by Shelile’s attendance of the cocktail despite his busy schedule. Many businesses fail because of lack of government support but Shelile had shown there was political will to create an enabling environment.
Speaking on the sidelines of the cocktail, Mokuku said they were impressed by what SNKH had achieved.
He said many of the enterprises were engine investor ready and the plan was to make sure that they graduated into becoming venture capital ready.
“Also, we are going to link them up with commercial banks and other financial institutions so that they can expand and grow. The main objective of this entrepreneurship hub is to create a pipeline of investable enterprises that then can grow and have a national and global footprint which would then create more jobs and alleviate poverty in Lesotho,” Mokuku said.
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SNKH progamme manager, Tiisetso Moroke, said dealing with creatives was challenging because of their propensity to “do things randomly”.
“When it came to formalising their businesses, it was challenging to find a balance, but we have managed to overcome such challenges. We are happy that all the enterprises including those that were just starting up, are now compliant with all business regulations,” Moroke said.
The enterprises now all have business bank accounts, marketing plans and they all now have brand new equipment purchased by Cafi.
“Now they all understand that in as much as what they do is driven by passion, it is a business,” she said.
