$22m boost for SMEs
THE Government has mobilised $22 million to finance Small to Medium Enterprises (SMEs), which will be accessed through the Small Enterprises Development Corporation (Sedco), a Cabinet Minister has said.
Speaking during a tour of small businesses in the Midlands on Thursday, Small to Medium Enterprises and Co-operative Development Minister Cde Sithembiso Nyoni said Treasury would soon avail $15 million to small businesses while the Arab Bank for Development in Africa (BADEA) would inject $7 million to those in the manufacturing and other productive sectors of the economy.
“Sedco is looking for up to $15 million that’ll be availed by the Government and we want to make sure that it’s distributed mainly to the productive sector and value chains. We want people that are in manufacturing as opposed to cross border traders who take the money out of the country,” she said.
Minister Nyoni said the Government has applied for $7 million from BADEA, which has since been approved and would be channelled to stimulate growth in small businesses.
She said: “We’ve money which we got through BADEA which will be used to support SMEs in production, farming, construction and manufacturing. We’re still sourcing funding from other partners. This is why I’m moving around (the provinces) to make sure that when that money comes, we are funding people that are grounded in business.”
The tour saw the minister visiting companies among them Nyangara Steel Engineering, Midlands Metals, Zimbuild Properties and Associated Business Units, which are subcontracted by Bata to make shoes on behalf of the shoe manufacturer.
Speaking on the sidelines of the tour, Zimbabwe Chamber for Small to Medium Enterprises (ZCSMEs) deputy secretary general, Mr Rabson Hove, said three pillars — capitalisation of SMEs, provision of work spaces and systems of training should be put in place to ensure the growth of the sector.
“What has stagnated the growth of SMEs is the lack of capital as banks are not willing to give us money to grow our businesses which makes it difficult to formalise,” he said.
“The tax regime in the country also makes it difficult for SMEs to comply because they are punitive. We have engaged the Minister of Finance (Patrick Chinamasa) so that he lowers the tax regimes for SMEs so that they can freely comply. For instance a hair salon is expected to pay $1 500 in presumptive tax every quarter and no one in his/her mind would want to comply.”
A research by the World Bank has vindicated the Zimstat findings as it shows that over five million of the 13 million Zimbabwean population is employed in the informal sector. — @lavuzigara1