The Consultants’ Corner: Q&A with a TPA

Inglis Nyamilandu is the founding partner of Advantage Capital and Consultants Limited, the third-party advisor performing due diligence, monitoring and evaluation, and risk management and mitigation on behalf of Shared Interest in Malawi. Along with three other colleagues, Inglis founded Advantage in 2019 to support businesses to develop and optimize their value proposition to be better able to attract much-needed financing. Leveraging his twenty years of experience in banking, credit risk management, and structuring credit products, Inglis and his team have been instrumental in the analysis and execution of the recent transaction, guaranteed by Shared Interest, for floating fish feed manufacturer, Lenziemill Milling. Inglis is not only a financial consultant, but also a farmer involved in crop production and rearing of livestock, which gives him deep knowledge and experience with this work. Currently reviewing another potential transaction for a moringa outgrower scheme catalyzed by a Shared Interest guarantee, he is a believer in the importance of mobilizing local Malawian lenders.

SI: What made you decide to establish Advantage?

IN: We decided to set up the company to address the information asymmetry problem in lending. We noticed a huge skills gap in compiling and presenting funding proposals as most deals get turned down not because the proposal is not viable but because it has been poorly presented or wrongly structured. As a service to our clients looking for funding, our involvement helps in cutting down on reworking applications and connecting our clients to the right financiers.

SI: Why is financing for SMEs critical, particularly now in the time of COVID?

IN: SMEs are a vulnerable category in the business landscape as they do not have any financial buffers to withstand business disruption of the scale brought about by the pandemic. The sector employs over 50% of the total workforce in Malawi, hence financing SMEs during times of COVID helps in protecting livelihoods. Furthermore, it is important that SMEs are not denied access to finance as any initiatives that do not involve SMEs will not lead to creation of a solid foundation for a broad-based economic recovery.

SI: How are SI’s loan guarantees an important catalyst of SME financing?

IN: The general business risk profile of Malawi’s SMEs during these times of COVID is high, and usually banks have very limited (if at all any) appetite to lend to SMEs without collateral. The availability of SI loan guarantees is very important as it allows viable SME businesses which are currently struggling and do not have full collateral to access bank financing. And for SME businesses wishing to scale up their operations but without the asset base to support bank financing in terms of collateral, the SI guarantee helps them to pursue their growth plans.