Lehlohonolo Motsoari
In a move aimed at supporting small enterprises and larger commercial businesses to better handle cash flow challenges, Standard Lesotho Bank has unveiled a collection of three new trade finance products.
The announcement was made by Keketso Makara, the bank’s Head of Business and Commercial Banking, who highlighted the initiative’s goal to address liquidity challenges and improve access to finance, key barriers to economic growth in Lesotho.
The bank’s new trade finance offerings include three main products namely Invoice Discounting Finance (IDF), Local Purchase Order (LPO) Finance, and Contract Finance (CF). These products are designed to provide essential liquidity and capital to businesses, ensuring smooth operations and facilitating growth.
Invoice Discounting Finance is a short-term solution that allows businesses to borrow against their sales invoices before payment is received from buyers.
“This form of post-delivery financing enhances working capital and cash flow. For example, a supplier with an outstanding invoice of M100 000 can use this option to secure funds needed to fulfill new orders,” explained Makara.
Local Purchase Order Finance on the other hand, provides businesses with the capital to pay suppliers in advance for verified purchase orders. This product is especially beneficial for businesses facing large orders but lacking immediate funds.
“Businesses can avoid draining cash reserves or missing out on new opportunities due to cash flow issues,” noted Makara.
He cited an example of financing a supplier’s order for police uniforms, enabling the supplier to meet demand without the financial strain.
Contract Finance offers short-term working capital to businesses fulfilling verified contracts, with the financing term limited to the contract period, typically not exceeding 24 months.
“This solution ensures businesses can continue operations and complete projects on time, even without immediate liquidity,” Makara highlighted.
These innovative financial solutions underscore Standard Lesotho Bank’s commitment to driving economic growth in Lesotho.
“We believe our offerings will significantly boost trade. As a leading bank, we continue to prove that Standard Lesotho is indeed a partner for growth, supporting the prosperity of Lesotho and its people,” Makara concluded.
Lerato Sekolopata from TP Technologies, an ICT company, shared their positive experience with the new products after his firm received M1 million in trade financing.
“We needed financing for an order, and Standard Lesotho Bank provided the necessary funds, allowing us to meet our customer’s needs despite payment delays from the government,” said Sekolopata.
