Smedco’s Vir­tual In­cu­ba­tion Pro­gramme now in full swing

Sunday News (Zimbabwe) - - Finance - Wilson Dakwa Busi­ness Re­porter

THE Min­istry of Small to Medium En­ter­prises and Co-op­er­a­tive De­vel­op­ment is aim­ing at en­hanc­ing the life­span and suc­cess rate of SMEs through its Vir­tual In­cu­ba­tion Pro­gramme.

Speak­ing on the side­lines at a SMEs work­shop or­gan­ised by DHL Ex­press, di­rec­tor of busi­ness de­vel­op­ment in the min­istry, Mr David Nyakonda said the birth rate of SMEs was al­most sim­i­lar to the demise rate.

“Many SMEs’ life­spans are very short and this shows that they need help from the min­istry for them to re­main in busi­ness. The demise of SMEs is mainly due to lack of train­ing, de­mand driven pro­duc­tion, workspace and link­ages to crit­i­cal stake­hold­ers.

“We en­list SMEs on board and we will hand­hold them over a pe­riod of three to six years. Dur­ing this pe­riod, we train them on tech­ni­cal ar­eas, busi­ness ar­eas, in­ter­act with them, visit their premises and in­quire about their chal­lenges then group them ac­cord­ing to their chal­lenges and then ad­dress the chal­lenges from a cor­po­rate view­point,” said Mr Nyakonda.

The Vir­tual In­cu­ba­tion Pro­gramme was launched last year by Vice-Pres­i­dent Em­mer­son Mnan­gagwa.

Mr Nyakonda also said the Small and Medium En­ter­prises De­vel­op­ment Cor­po­ra­tion (Smedco) was now op­er­a­tional and had since started dis­burs­ing loans. He added that a sim­i­lar cri­te­ria to se­lect ben­e­fi­cia­ries has been im­ple­mented al­though with a bias to­wards man­u­fac­tur­ers.

“In terms of fund­ing, they (SMEs) have to spec­ify whether they want work­ing cap­i­tal or de­vel­op­ment cap­i­tal and then we at­tach them to banks or Smedco. Smedco is now op­er­a­tional and started dis­burs­ing loans early this year. The doors are now open for SMEs and we have a bias to­wards man­u­fac­tur­ers be­cause we want to ex­port, value add and ex­ploit our nat­u­ral re­sources.

“The in­ter­est rate is much lower com­pared to that of mi­cro­fi­nance in­sti­tu­tions. So far, a size­able num­ber of ben­e­fi­cia­ries have re­ceived loans and more peo­ple keep ap­ply­ing for the loans. The turn­arounds of the loans will go a long way in fund­ing work­ing cap­i­tal and bring­ing life to many of our SMEs. The max­i­mum loan amount is $50 000 per in­di­vid­ual or cor­po­ra­tive,” he said.

Smedco which changed its name from Small En­ter­prises De­vel­op­ment Cor­po­ra­tion (Sedco) fol­low­ing amend­ments to the SME Act in Fe­bru­ary 2014 is a paras­tatal un­der the Min­istry of Small and Medium En­ter­prises and Co-op­er­a­tive De­vel­op­ment.

It is a de­vel­op­ment fi­nance in­sti­tu­tion which pri­mar­ily ex­ists to pro­mote the de­vel­op­ment of mi­cro, small and medium en­ter­prises, and co-op­er­a­tives in the coun­try, through lend­ing and ca­pac­ity build­ing. It is also one of the fi­nance houses in the coun­try whose man­date is to cap­i­talise the small busi­nesses.

Mr Nyakonda urged as­pir­ing en­trepreneurs to re­search on the mar­ket for their prod­ucts be­fore ven­tur­ing into busi­ness so as to pre­vent pre­ma­ture demise due to low up­take.

“It is nec­es­sary for SMEs to be in­volved in a prod­uct they have knowl­edge about and full ap­pre­ci­a­tion of the life cy­cle of the prod­uct. Is­sues of the life cy­cle also re­late to the mar­ket. If the up­take of the prod­ucts is high, then the prod­uct gets into a new phase, from idea gen­er­a­tion to pro­duc­tion and this is the growth stage,” said Mr Nyakonda.

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