Maravi

Fundanga bemoans reduced lending to informal sector

COMMENT - Perhaps economists shouldn't be in charge of making SME policy. Small business people only. Also, how can he blame SMEs for not creating 'robust business plans'? Do they get help doing so? If not, why would they sprout such skills spontaneously? Another example of blaming the failure of a 'hands off' laissez faire 'market based' policy on someone else.

Fundanga bemoans reduced lending to informal sector
By Allan Mulenga and Terence Miselo
Thu 14 Jan. 2010, 04:00 CAT

BANK of Zambia governor Dr Caleb Fundanga has said commercial banks’ reduced lending to the informal sector is as a result of the inability by entrepreneurs to articulate and sell bankable projects through robust business plans.

During the launch of Intermarket Banking Corporation’s Venturecomp 2010 business plan competition targeted at students in higher learning institutions with paucity of opportunities to enter into businesses in Lusaka on Tuesday, Dr Fundanga said most of the credit extended by banks and microfinance institutions was targeted at individuals in formal employment or with already established enterprises.

“…Only an insignificant amount credit is extended to start-up initiatives or the informal sector. This has been exacerbated by the inability of entrepreneurs to articulate and sell bankable projects through robust business plans,” he said.

Dr Fundanga added that the other reason was that most Zambians preferred to be in formal employment rather than engage in entrepreneurial activities on a full time basis.

“The small number of educated Zambians engaging in entrepreneurial activities limits the scale of indigenous businesses as evidenced by the non-participation of Zambians in major sectors of the economy like mining or manufacturing,” he said.

Dr Fundanga noted that it was however important to realise that individual entrepreneurs, as well as small and medium enterprises (SMEs), formed the engine of economic and social development as they generated the much-needed employment.

And Intermarket Banking Corporation managing director Subhrendu Chatterji explained that the Venturecomp 2010 worth K100 million was aimed at fostering entrepreneurship among young people and was open to all students in various disciplines.

Labels: CALEB FUNDANGA, INFORMAL ECONOMY, MARKETEERS

posted by MrK @ 5:20 AM