By Saio Marrah
Small and Medium Enterprises (SMEs) have during discussions with major international investment institutions for access to finance, urged banking institutions to reduce the high interest rate and increase the duration of payment when giving out investment capital.
Africa Resilience Investment Accelerator (ARIA) and Invest Salone organized the event held at Freetown City Hall on Wednesday 1st November 2023.
Nine major international investment institutions, with experience working in developing countries, discussed tactics for improving Sierra Leone’s capital markets with over 30 Sierra Leonean SMEs.
During the dialogue, SME participants were asked to highlight the challenges in accessing investment or growth capital.
The Chief Executive Officer of FLS Power Energy and Power Solutions, Foday Lansana Suma, noted that accessing growth capital is difficult, with the banks mostly asking for something they do not have.
According to him, his company had identified communities where they could invest in mini-grid (solar energy) and get back the money spent together with profits from those communities but admitted that getting the funds to execute such an exercise has been challenging.
Various representatives of SMEs highlighted the drivers for their operations such as concessional loans for investment in areas like poultry but spoke about unfavourable loan conditions by the banks including high interest rates, and short repayment periods.
They called for the establishment of investment banks that give out less risky loans.
A representative from the banking sector said one of the challenges in giving out investment credit to SMEs is that they mostly present good business plans, but the implementation would be something else. The need for the banks to train the SMEs on how to put together workable business plans, and conduct proper supervision of the businesses were highlighted.
The dialogue was climaxed by pitching, where three business entities Sierra Akker SL Limited, FLS Power, and Massada did individual PowerPoint presentations. A panel of judges at the end voted FLS Power the best of the three.
The three all stressed the need for more funds to be invested in their businesses so they could expand and create more innovative ways.
British International Investment Co-Lead of the ARIA Initiative, Alex Kusharski, later told Journalists that they want to support businesses in Sierra Leone as according to him, the country has low investment.
He said that they would be looking out for entrepreneurs with a record of accomplishment and strong management strategies.
ARIA is an initiative bringing together 16 Development Finance Institutions (DFIs), initially funded by British International Investment and other partners.
Invest Salone is a UK government-funded, private-sector development programme that boosts investment in agriculture, manufacturing, fisheries, and tourism by supporting firms to grow their exports. The overall aim is to increase income and employment for thousands of Sierra Leonean women and men.
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