Most small-scale entrepreneurs cannot expand their businesses because of high barriers to capital financing created by loan conditions imposed by local lending institutions.
This was said by Naserian Laizer, Loan Officer for Small Industries Development Organisation (SIDO) at a recent event to hand over 36m/- to micro entrepreneurs from Makorongoni ward in Iringa.
“Most entrepreneurs want to take loans but how do they meet the tough conditions?” he asked. He went on, “the government needs to intervene to make it easier for micro-business to get loans from the commercial banks.”
Doing its part, SIDO has issued over 200m/- in loans to entrepreneurs in Iringa Municipality and Kilolo District over the past three months to help them grow their businesses, according to Laizer.
The state body says it is part of its efforts to revitalise the Small and Medium Enterprises (SME) sector and empower locals to fight poverty.
“SIDO (provides) loans on easier terms – even our interests are low,” he said.
He said that they specifically target groups in rural areas, although he pointed out that payment delays and default rates are high in this segment.
“It’s unfortunate that some people aren’t diligent, they don’t make their (loan) repayments on time,” he noted, adding that Makongoroni loans were made possible only after the ward councillor agreed to guarantee them.
Earlier, Ward Councillor Thadeus Tenga had told a gathering of 35 micro entrepreneurs that the goal of loans such as SIDO’s is to help the local community succeed in business.
He said that he had agreed to back the loans to ensure his constituents get the money they need to grow their businesses. Each entrepreneur received between 300,000/- and 500,000/- towards their venture.
SOURCE: THE GUARDIAN
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