Catalyzing Entrepreneurial Growth and Job Creation in Lesotho

After a five-year struggle with unemployment following his tertiary education, Mosebetsi found inspiration in his name, 'work' in English. He realized he was destined to create work, not wait for a job. In 2016, at age 27, he co-founded Iconics Clothing, a venture that gained instrumental support and guidance from the Lesotho Competitiveness and Financial Inclusion Project (CAFI).

Iconics Clothing was one of the first 50 enterprises receiving support, a one-off grant of $7,000, which was effectively used to purchase industrial sewing and packaging machines. These significantly increased production and the company now employs 10 full-time staff, up from three, and has scaled up production from 20 garments daily to 50, boosting its revenue from $700 to $7,500 in the first month after receiving the grant. Iconics makes personal protective garments and also produces thermally heated apparel, which is much needed during the winter in Lesotho. The company's revenue has been steadily increasing since the incubation, thanks to their increased capacity to produce. They are now uniquely positioned and receive large orders from other contractors.

Staff at work in the Iconics factory building. Photo: Iconics

The CAFI Project aims to increase access to business support services and financial products for micro, small and medium enterprises (MSMEs) and entrepreneurs, especially those owned by women and youth. The business and entrepreneurs selected receive grants, mentoring on their business models and plans, and their progress is assisted and monitored over an "incubation" period, with the goal of scaling up from start-up/concept stage to an investable stage. The first cohort of 50 started their incubation from November 2023 to May 2024. The six-year project, started in 2022, seeks to incubate 500 enterprises by 2028 under the Lesotho Entrepreneurship Hub program.

The project also supports the training of enterprise support organizations (ESOs), which act as "entrepreneurship accelerators" and provide services and training to aspiring entrepreneurs in the country. The five ESOs in the first cohort provided training and mentorship to the 50 selected enterprises, tracked their progress over the six-month incubation period, and connected them with relevant industry professionals. This was done to increase the enterprises' likelihood of success, post-incubation, ensuring the incubation process, and also helping to connect them to relevant industry professionals.

"The incubation helped us through the grant, and we learned and refined our marketing skills, which has helped us attract clients. Additionally, through The Entrepreneurs Network ESO I was under, I was introduced to prospective clients, and the networking has proved valuable. We look forward to growing and expanding the business so we can one day venture into exports," says Rapitso Mosebetsi.

Another entrepreneur, Tsolo Makakane, concurs with the positive impact of the CAFI Project. The 23-year-old co-founder of the digital communications agency, Inkstream Media, took part in the project motivated by the fact that he is a recent graduate with no work experience and needed support to build his skills to grow and scale his enterprise. Through the project, he has built capacity and been able to accept large-scale productions and currently has 12 billboards around the country.

Inkstream Media workers installing signs. Photo: Inkstream

Before the project, he could only accept six to seven clients a month, and his capacity has now increased by 100% with a 40-50% increase in revenue. He now has a team of six people and his company used the grant to purchase more laptops, design software, and cameras, which they are using to collect authentic stock images from Lesotho. Tsolo, who graduated from Limkokwing University, was under the University's Entrepreneurship Accelerator Program Incubation Hub (a certified ESO).

Ms. Lisema Ramaili, the Limkokwing University Hub Manager, says they were excited to participate in the project, having already run similar entrepreneurship acceleration programs. "We are thrilled that we made it …. We developed a selection criterion for the enterprises. Four of the 10 we incubated were in ICT, while the rest were in fashion and apparel, travel and tourism, agriculture, media, and communications. We remain in contact with our first batch and can provide them with support and advice where required."

The Limkokwing Hub works with graduates from its institutions who have registered businesses and ensures that the enterprises are tax-compliant and registered with the Ministry of Trade, Industry, and Business Development. The hub also provided the participants with skills in market research, conflict resolution, and negotiation, and a university psychologist was also enlisted to support the social development of the entrepreneurs.

CAFI is a project of the Government of Lesotho, supported with $52.5 million from the World Bank and a grant of $950,000 from the India, Brazil, South Africa (IBSA) Fund. The project is designed to improve the business environment and strengthen the resilience of MSMEs in the country, which will improve the livelihoods and economy of Lesotho and its people. In addition to the Lesotho Entrepreneurship Hub Program, the CAFI project also supports the expansion of commercial horticulture farming, revitalization of Lesotho's textiles and apparel sector, and business environment improvements, including enhancing access to financing and disaster resilience for MSMEs.

The CAFI Project is part of the World Bank Group's support for private sector development in Lesotho. The WBG engagement strategy, as elaborated in the Lesotho Country Partnership Framework (CPF) (FY24-28), seeks to support private sector-led growth.

Additional private sector support in the country includes the Southern Africa Trade Facilitation Project, which improves trade efficiencies, the Integrated Transport, Trade, and Logistics Project, which invests in smart, one-stop commercial borders and climate-resilient road and trade corridors, and the Smallholder Agriculture Development Project, which supports climate-resilient agriculture. The World Bank and International Finance Corporation are working with the government and development partners to create an improved climate for investment to drive private sector development and job creation.

Public link

Please use the above public link if you want to share this noodl on another website.