Sunday, August 22, 2010

Ethiopia: South to Dole Out Millions to New Micro Businesses

The Small and Microfinance Enterprise Agency (SMEA) of the Southern Nations, Nationalities, and Peoples (SNNP) region allocated 100 million Br for loans to be given to newly established Small and Microfinance Enterprises (SMEs) during the 2010/11 fiscal year.

The agency, which mainly generates its financial source from Omo Microfinance SC, allocates 132 million Br every year for loans to SMEs. Out of this amount allocated for loans to SMEs in the 2009/10 fiscal year, 88 million Br has already been recovered and the agency hopes to recover the remaining in three months time, according to Gebremeskel Chala, general manager of the agency.

"The agency plans to make the loans available to 63,202 people organised in different businesseses," Gebremeskel told Fortune.

Around 24,000 people are organised in 690 enterprises that engage in textile and clothing, metal and wood work, agro processing, construction, and urban beautification and sanitation. The remaining, nearly 39,000 people, have planned to organise themselves in the provision of services and other businesses, according to Gebremeskel.

The loans are expected to become available as of August 23, 2010, in 22 reform towns of the region including, Hawassa, Arba Minch, Wolayita Sodo, Hosanna, Aleta Wendo, Yirgalem, Welkite, and Butajira.

Construction of 42 SME centres in the reform towns of the region, which began two years ago at an estimated cost of 390 million Br, have commenced work since July 9, 2010. The centres comprise 309 blocks that accommodate workshops, sales rooms, and training centres.

"The blocks are made available for rent at an affordable price for a definite period to enterprises engaged in textile and clothing, metal and wood work, and food processing," Gebremeskel told Fortune. "Once the enterprises are self-sufficient, they will be transferred to other newly established ones."

The agency also engages in searching markets to increase the competitiveness of the due to be established and existing SMEs.

An estimated 120.8 million Br has been allocated to curb the lack of market and increase the competitiveness of the existing and future SMEs, according to Gebremeskel.

The agency, which also provides assistance in the provision of logistics and training, has managed to organise over 14,000 enterprises comprising of approximately 176,000 people following the restructuring of the SMEs in the region five years ago

Source: Addis Fortune (Addis Ababa)

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