By Malisema Mahloane
Maseru – Standard Lesotho Bank head of commercial banking at Mphaphathi Letsie says the objective of infrastructure and construction Lekhotla event it is meant for Basotho to access financing. It is a realized fact that in term of the macroeconomic sector of Lesotho the construction sector is actually contributing significantly especially at the backdrop of the Lesotho Highlands Development Authority phase II project Polihali that has already commenced. Most of the bank’s clients have actually participated in the construction of infrastructure space.
An unparalleled event filled with content-rich sessions and global perspectives from renowned and well-versed leaders within the industry. The goal was to drive the development of the industry and enhance the economic well-being of Basotho. The big objective of this Lekhotla symposium was to host big giants in the infrastructure and construction fraternity, to explore opportunities and create solutions within the industry.
Construction is mainly the biggest sector in SLB portfolios. With the Lesotho Highland Water Project (LHWP) and the lowlands project underway SLB ready to support Basotho financially. The lowlands project which will be working on supplying water throughout the country has already received funding from the world bank and the are developments which prove the construction industry will be active. These two major mega projects are definitely opening job opportunities for Basotho and therefore SLB is inviting its clients to take part in the projects knowing well that they have support from the bank.
“We have seen and heard your frustrations now let’s hear the available opportunities, let us see how we can solve challenges and provide financing support,” Letsie emphasized the bank’s willingness to support.
Letsie has audibly stated that the bank is more than willing to be the guarantor for all of their clients anytime they have proven jobs in construction. She explained that the major setback normally in this industry and many others of course arises when proof of project financing is a demanded as part of the procedures by the potential employer. This is a case where clients bid for tenders and are requested to provide proof they do actually have the money to start and finish the job needed. As a bank they are there to provide such documentation as way to assist the client get the job. However, the only way they can prove the client can deliver is have funds secured in their bank. They need to ascertain that whatever the magnitude of the finance required is 100 percent actually there in the bank.
In some cases, clients are in need of working capital to finance their projects, the bank is ready to discuss the dynamics of providing such funding. For the new players in the industry there is Bacha Entrepreneurship Project that assists with startup capital for businesses in idea and emerging stages. While for already existing business the bank is willing to assist with business term loans from medium to long.
Where a client has a contract awarded legitimately, the bank is willing to assist with contract financing whereby they use the contract as their proof of payment. All the clients have to do is present the awarded project and the bank will finance at the backdrop of that award. The tenure for the contract financing is normally 6 months that is inclusive of payment holiday. The holiday accommodates delays in payments from the employer that are always anticipated. During this holiday no loan payments are demanded due to lack of income by the client.
For mega industries, clients are normally expected to own yellow plant which for many newcomers in the industry it could be a setback. The bank has a funding in their vehicle asset financing department. In cases where the client has business interests in China, SLB has Africa China Trade Solutions (ACTS) where they easily finance assets and other product procurement. For this Letsie emphasis they give priority to SLB clients.
With this Lekhotla event or symposium the Letsie says the bank wants to see Basotho confidently investing in the construction and infrastructure projects, young people having long term partnerships with industry experts while the sector stays financially vibrant. The bank is confident that any project however ambitious, it can finance. Through the Lekhotla it is important for aspiring industry players to note the bank is ready to finance any projects provided by LHDA and LNDC as their alliance partners.