BASOTHO Enterprises Development Corporation (BEDCO) on Monday signed a Memorandum of Understanding (MoU) with an American based venture capital company, Enygma Ventures in a move that seeks to support Basotho Micro, Small and Medium Enterprise (MSMEs) to access finance.
Sept. 14, 2021
3 min read
BEDCO signs venture capital deal
BEDCO CEO, Idia Penane
- Move to give small businesses access to funds
- Focus is empowerment of female entrepreneurs
Metro Radio Podcast
Catch our weekly audio broadcast every Friday only on Metro Radio Podcast News.listen now
With its operations in South Africa, Enygma will support local MSMEs by ensuring that they get funding through non-traditional means, namely venture capital, to grow and scale up their business ventures.
This will be done by offering adequate support to meet investor requirements. MSMEs will receive capital injection ranging from a minimum of M365 000 up to M14 000 000 towards their businesses in exchange for an agreed stake in the business.
BEDCO will support MSMEs with business proposal development taking into consideration the specific requirements of Enygma Ventures. This will be done through organising linkage platforms as a way for investors to meet MSMEs.
The agreement will be valid for five years and one of BEDCO’s primary roles will be to mobilise and support MSMEs with business proposal preparations and investor readiness.
BEDCO will further support MSMEs post funding with adherence to requirements as set out in the funding agreements through various interventions which include business coaching, funds management support and incubation.
“This MoU will enable us to collectively assist identified MSMEs address their access to finance challenges. This will in turn enable BEDCO to contribute to the economic growth of Lesotho through an increased number of sustainable MSMEs that contribute to job creation and poverty alleviation in Lesotho,” BEDCO Chief Executive Officer, Idia Penane said during the virtual signing.
Enygma Ventures is one of the first Venture Capital companies identified for collaboration to finance local MSMEs. It is a venture capital fund outfit focused on investing in female entrepreneurs and women founders, targeting the southern African region.
The US based fund company is unique purpose driven investment fund, aimed at empowering, mentoring and capitalising outstanding female entrepreneurs in the region.
Enjoy our daily newsletter from today
Access exclusive newsletters, along with previews of new media releases.
The MSME sector is crucial to the development and sustainability of the country’s economy. In most countries, these businesses contribute about 70 percent towards job creation, but in Lesotho the sector faces numerous challenges that inhibit growth and impact.
Access to finance and capital has been identified as one of the biggest constraints.
As a government agency with a clear mandate to grow and promote the MSME sector, BEDCO has made concerted efforts to assist in addressing some of the challenges towards access to finance.
These efforts include exploring the use of non-traditional financing methods that involve engaging with venture capital firms to finance Basotho MSME sector.
The primary basis of BEDCO’s 2021/25 strategy is in line with the National Strategic Development Plan (NSDP II) and the MSME policy. The strategy particularly draws from the first Key Priority Area (KPA) of the NSDP II with focus on enhancing inclusive and sustainable economic growth as well as private sector job creation.
The strategy recognises the significant role that entrepreneurship plays in the achievement of the NSDP II and therefore aims to provide a more focused approach to the development of Basotho enterprises based on the NSDP identified priority areas.