By: Nkosiyabusa Nsibande
Eswatini’s creative economy is increasingly being recognized as a source of entrepreneurship, employment, and export potential. Yet despite the abundance of creative talent, many businesses fail to transition from small, informal operations into scalable enterprises capable of attracting institutional finance.
According to Standard Bank Eswatini Head of Business and Commercial Banking, Mlamuli Hlatshwayo, the challenge is not that banks are unwilling to finance creative businesses. Rather, many entrepreneurs arrive seeking capital before building businesses that satisfy the commercial requirements of lenders.
His remarks during the Standard Bank Luju Fashion Indaba challenged one of the most persistent misconceptions among small businesses, that funding is the starting point of growth. Instead, he argued that finance follows commercial discipline.
“When I sit to you as your banker, I need you to tell me the story of how you’re running the business,” Hlatshwayo said. “Where are you sourcing things? How much does it cost you? Do you know how much it costs you?”
Behind those questions lies the foundation of modern commercial banking. Banks do not merely evaluate products or creativity; they assess management capability, cash flow, profitability, and operational discipline. A compelling design portfolio may win customers, but only sound financial management convinces lenders that a business can generate sustainable returns and repay borrowed capital.
For many fashion businesses, one of the most overlooked weaknesses is the inability to distinguish turnover from profitability. Sales growth often creates the illusion of financial success, even as rising production costs steadily erode margins.
“You need to understand your profitability versus income,” Hlatshwayo explained. “Because once you’ve received the income, you need to deduct your costs and all those things so that you can know how much profit you’re actually making.”
That distinction matters enormously. Profit, not revenue, creates retained earnings, finances expansion, cushions businesses during economic downturns, and ultimately determines whether an enterprise can survive witho constant borrowing.
Equally significant is the quality of financial records. Entrepreneurs who cannot accurately account for production costs, supplier payments, inventory levels, and operating expenses struggle to provide the information required during a credit assessment. Weak record keeping increases uncertainty, and uncertainty increases lending risk. For financiers, reliable financial statements are not paperwork; they are evidence that a business owner understands the enterprise well enough to manage growth responsibly.
Hlatshwayo also highlighted another commercial weakness frequently observed across SMEs: inadequate planning for seasonal demand.
Fashion businesses operate within highly predictable economic cycles. Weddings, cultural ceremonies, festivals, year-end functions, and major lifestyle events generate recurring spikes in consumer spending. Yet many businesses continue to treat these opportunities as unexpected rather than planned.
“Planning is also another challenge that we see in businesses,” he noted. “Sometimes businesses struggle to plan for seasonality and those types of things, and that really challenges them.”
Businesses that anticipate demand months in advance are better positioned to manage inventory, negotiate supplier contracts, organize production schedules, and preserve working capital. Those that fail to prepare often miss revenue opportunities precisely when demand is strongest. Perhaps Hlatshwayo’s most striking observation concerned entrepreneurs who pursue finance before establishing a market.
“Oftentimes businesses are looking for funding, but they don’t yet have clients,” he said. “You need to understand: do you need clients, or do you need funding?”
The distinction speaks directly to investment readiness. A business with recurring customers, predictable orders, and stable cash flow often represents a lower lending risk than one with ambitious expansion plans but no proven market. Commercial finance is designed to accelerate demonstrated demand, not create it.
Another recurring weakness is founder dependency. Many creative businesses remain centered entirely around the technical abilities of one individual. While exceptional craftsmanship may produce a quality product, sustainable businesses require broader capabilities encompassing finance, operations, marketing, and strategic partnerships.
“You may be a great seamstress, but you may struggle with partnering,” Hlatshwayo observed. “Where are the fashion people who are in that industry that can assist you with those types of things? Because that’s where you then build the economies of scale.”
Partnerships reduce operational bottlenecks, expand production capacity, and improve competitiveness. They also reduce key-person risk, an increasingly important consideration for banks and investors evaluating long-term business sustainability. Central to Hlatshwayo’s address was a deliberate distinction between financial education and financial literacy.
“We’re not saying to you as fashion designers or as creatives, ‘Be financially educated.’ The word is financial literacy.”
His point was practical rather than academic. Entrepreneurs are not expected to become chartered accountants. They are expected to understand the financial drivers of their own businesses: revenue, costs, cash flow, margins, working capital, and investment requirements. That level of literacy fundamentally changes conversations with lenders.
“Creativity will get you customers, guys. However, the financial literacy will ensure that your business doors are opened.” Hlatshwayo further encouraged entrepreneurs to think beyond their immediate products and identify untapped commercial opportunities within existing value chains. Waste materials, by-products, and adjacent services often represent overlooked revenue streams capable of strengthening profitability without requiring entirely new business models.
His broader message reflects an increasingly important shift within SME finance. Financial institutions are moving away from lending against collateral alone and towards assessing the overall quality of a business model, management capability, and financial discipline.
For Eswatini’s fashion industry, this represents both a challenge and an opportunity. As the country seeks to develop competitive creative industries capable of generating exports, employment, and enterprise growth, commercial success will increasingly depend on entrepreneurs who combine creativity with financial competence. The future of fashion businesses may therefore depend less on finding capital than on becoming businesses worthy of investment.
Why It Matters
For investors and lenders, Mlamuli Hlatshwayo’s remarks reinforce a simple but often overlooked principle: access to finance is an outcome of business quality rather than a substitute for it.
Businesses that maintain accurate financial records, understand profitability, anticipate seasonal demand, and demonstrate recurring customer demand present significantly lower credit risk. These characteristics improve access not only to bank finance but also to equity investment, supplier credit, and development finance.
For Eswatini, improving financial literacy among SMEs has wider economic implications. Stronger businesses create more formal employment, strengthen domestic value chains, increase tax revenues, and expand the pipeline of investment-ready enterprises capable of participating in regional and international markets.
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