RELAX LENDING LOANS CRITERIA, BANKS TOLD

By PRINCE CHIBAWAH FINANCIAL institutions in Zambia have been challenged to relax loan requirements to increase access for Small and Medium Enterprises (SMEs), particularly those whose businesses were materialising.

In an interview, Alliance for Luapula Young Entrepreneurs (ALYE) said SMEs especially in rural areas were facing difficulties to obtain funding due to the cumbersome procedures.

ALYE executive director, Edwin Nyirongo said even SMEs that were already in business were also struggling to access investment loans to expand their operations.

“A good number of youths are willing to start up their own enterprises but they are failing due to the limited resources.

In Luapula and Northern provinces where we have a strong presence as ALYE, we have come across young people with good project proposals or business plans but most of the financial institutions are reluctant to fund them.”

He said collateral requirement should be scrapped off and replaced with something that would perfectly work for both the banks and potential entrepreneurs.

Mr Nyirongo said the situation was contributing to unemployment and poverty levels in the country.

“Until government through the Bank of Zambia (BOZ) does something to correct the situation, the poverty and unemployment levels in these two regions, for example, will continue to skyrocket,” said Mr Nyirongo.