Swazi business development

The Swazi Business Growth Trust (SBGT), to be created at project start-up, will: create a small business loan program; strengthen linkages between small and large firms; provide business training; and strengthen business associations. The project will establish a credit unit within SBGT to operate two distinct loan programs for small businesses: (1) a Small Loan Program, for loans ranging from E1,000 to E20,000; and (2) a Loan Assistance Program, for loans over E20,000 to promising businesses that have been unable to obtain commercial credit. The SBGT will provide credit guarantees to commercial banks for both types of loans; it will also provide borrowers with credit application, appraisal, and monitoring assistance. All SBGT credit unit staff will receive training, including a 2-month study tour of the Get Ahead Foundation in South Africa. The SBGT will create a Business Development Unit to help small businesses develop business relationships with large, local companies and/or the Government of Swaziland (GOS). The BDU will: (1) survey large businesses to identify potential linkage opportunities; (2) select about 30 small businesses to receive intensive direct management assistance and a lesser number to receive less intensive assistance through extension services; (3) help business owners prepare business plans; (4) provide advice to businesses not receiving direct management assistance; and (5) develop a construction management training program to increase the number of small firms contracted by the GOS and large private firms. Where possible, local and regional training facilities and institutions will be used to provide management assistance. In addition to the direct management assistance provided by the BDU, the project will provide training to upgrade other small business skills. Workshops will be conducted in both technical and management skills. A total of 1,700 business owners/employees will receive some form of management assistance or technical training during the project. Finally, the project will strengthen approximately seven business organizations (including organizations serving women entrepreneurs). Types of assistance may include organizational advisory services, administrative and management personnel support, commodity support, and program strengthening through newsletters, leadership training, and the like. It is expected that these seven associations will have a key role in providing the above-mentioned training. Amendment of 2/28/95 authorizes a $5 million endowment to provide continuing core support for the SBGT after the project"s end. The endowment fund will be managed through an irrevocable trust agreement with a major U.S. investment management firm or asset management company. The objective will be to preserve the nominal value of the principal over time, with emphasis on the potential for long-term income. The amendment also extends the TA contract to allow more time for recruiting local personnel to fill top management positions in the SBGT. (PD-BCJ-763)