Innovation in business will help Seychelles entrepreneurs gain access to credit, says new minister

Local soap and fragrance manufacturers Exotic Scents combine natural ingredients and some innovative product designs to capture the attention of the buyer. (Joe Laurence, Seychelles News Agency) 

(Seychelles News Agency) - Developing the ability to be innovative among new businesses and entrepreneurs in Seychelles will help them to survive in the long term and also give them a better chance of gaining access to finance to start their ventures.

This is the view of Michael Benstrong, the minister of the newly-created Ministry of Investment, Entrepreneurship and Business Innovation, who was speaking to members of the local media at a press conference earlier this week alongside the new Minister of Finance, Trade and the Blue Economy, Jean Paul Adam and Central Bank Governor Caroline Abel.

Benstrong seemed in his element as he spoke of his ministry’s aim to help the Seychelles-owned business sector strengthen and grow. He stated that the ministry was made up of different departments cobbled together from other ministries, now made into a ministry in its own right.

“The President has rightly put all those activities that were under different portfolios under one Ministry,” he explained.

The minister also said that the investment component formerly under the Finance portfolio would no longer only focus on foreign direct investment and other external sources but would also look at opportunities for finding local investors as well.

Michael Benstrong, the minister of the newly-created Ministry of Investment, Entrepreneurship and Business Innovation, was speaking to members of the local media at a press conference earlier this week alongside the new Minister of Finance, Trade and the Blue Economy, Jean Paul Adam and Central Bank Governor Caroline Abel (Patrick Joubert, Seychelles News Agency) Photo License: CC-BY

He also said that the ease of doing business came in at the top of his ministry’s agenda, by addressing some of the bottlenecks in setting up a business in the 115-island archipelago of 90,000 inhabitants.

In October 2014, Seychelles was ranked 85th out of 189 countries in the World Bank’s 2015 Doing Business Report, climbing an effective two places from the previous year, placing Africa’s smallest nation in sixth place overall in sub-Saharan Africa and it is clear that Benstrong has been specifically tasked with improving Seychelles’ rankings for 2016.

“I cannot say we are going to solve everything overnight but we will work towards a programme… with all our stakeholders to see how we can improve our macro-SMEs and big businesses so that they can continue making their businesses in Seychelles, and also the new individuals who want to enter into the world of business, so we are going to improve the capacity of doing business in Seychelles,” Benstrong said.

Building sustainability in entrepreneurship

The minister pointed out that certain measures had already been put into place by the former Ministry of Finance, Trade and Investment over the past few years to improve access to credit for SMEs, adding that there were elements which needed to be reviewed to understand the real reasons that impeded small businesses from getting access to credit.

“If I may cite one [example] that is commonly seen among bankers, it is the way that projects are being presented to the banks,” said Benstrong. “Perhaps they have no capacity to do research, prepare and present a good project so that when they approach the banks they can give the banks some reassurance.”

Benstrong, who was formerly CEO of the Seychelles Commercial Bank before his appointment as minister, said that from his experience, people also have many difficulties providing adequate security for their loans as required by the banks in Seychelles.

Local fish processor Louis Bossy has developed a value-added business of salted, sundried and vacuum-sealed fish.(Romano Laurence, Seychelles News Agency) Photo License: CC-BY

“There are times when you have people coming forward with a good plan but when the bank tells them that they need an [immovable asset] of equal value they cannot deliver what the banks are asking them, so they are not able to get finance,” he said.

Benstrong said the government-led SME scheme, which commenced in 2013, was performing very well in terms of disbursement. The scheme works with commercial banks to offer low-interest, government-guaranteed loans to SMEs.

The minister said that now the ministry would need to ensure that after an entrepreneur got access to finance, he also received continual assistance to ensure that the business was sustained over the long term.

“There have been many instances where businesses have started well but then we have seen the business failing all of a sudden, but why? So we need to look for the causes and put a structure in place that will enable us to work with new entrepreneurs and SMEs to improve their capacity and give them ‘aftercare’ as well.”

Benstrong explained that this would create a “win-win situation” for all parties, giving the banks more confidence to give credit and also improve the business owner’s capacity for doing business. 

“I think the time has come for us to acknowledge that Seychelles as a nation, we do not have any big experience in business like other countries, for example, Mauritius,” said the minister. “So I feel that if we put more structures in place that will help improve the capacity of Seychellois they will get better access to credit.”

Local horticulturalists display their range of plants at a trade show (Joe Laurence, Seychelles News Agency) Photo Licence: CC-BY

Help to find a business niche

Innovation in business is one of the other areas that Minister Benstrong and his ministry will have to work hard to develop, understanding that small and medium enterprises are the drivers of job creation and wealth generation among the population, and the new minister has some very particular ideas about the sector that are ripe for more innovation in Seychelles.

“…something that we have seen often here is that if one individual does a particular activity that is successful, everyone suddenly jumps into the same activity… so we will work very hard to identify areas that have high potential and perhaps help some entrepreneurs to enter into that sector that has high potential so that they will do well,” said Benstrong.

The minister said he believed the greatest area for potential in Seychelles currently lies in value-added products, by processing and developing more sophisticated products from raw materials such as fish, cinnamon and other natural products.  

“There was someone who came to me and said that in Seychelles we know that aloe vera grows well here, but we are not extracting that potential, and there is great demand for these products in the world,” he explained.

“This type of information has not been put together well to present to entrepreneurs looking for opportunities to do business. So it is my belief that if Seychellois become a little more innovative, access to finance may well improve.”