Maravi

(SUNDAY MAIL ZW) Govt urges SMEs to make full use of funds

Govt urges SMEs to make full use of funds
Saturday, 30 June 2012 23:42
Prince Mushawevato

Government has urged Small to Medium Enterprises (SMEs) to increase uptake of the available loan facilities and efficiently use the money to boost operational and productive capacities.

Players in the sector have over the years indicated that a lack of funding was negatively impacting on operations. However, Small and Medium Enterprises and Co-operative Development Minister Mrs Sithembiso Nyoni said players were not approaching financial institutions that handle their funds to secure loans.

“All small to medium enterprises should make full use of funds availed to them through banks and the Small Enterprises Development Corporation (Sedco). The players in the sector need not rely on Government since it is only a facilitator of a certain percentage of the funds,” she said.

She indicated that although the Chinese government had made available a $30 million facility through the Infrastructure Development Bank of Zimbabwe (IDBZ), only a few of the players in the sector had applied for the loans.

“The Chinese government gave $30 million to Zimbabwe through IDBZ. The money is open to any registered small to medium enterprises, but the uptake has been low despite it attracting a small percentage interest.

“Players in the sector seem to be waiting for the ministry to give out funds to them,” she said, adding, “We have always referred those that have come to our offices in search of start-up or operational capital to banks for loans.”

SMEs, which employ a significant number of people, have been cited as an important sub-sector in the drive to increase productivity and contribute to the creation of a $100 billion economy by 2040.

The minister said Government continued to scout for funds to assist the players.

“It is difficult to state the exact figure that needs to be raised. The money is determined by the performance of the economy and the funds availed by the finance ministry. However, we are constantly in touch with our SMEs so that we help them as and when necessary,” she said.

Minister Nyoni said Government has increased training programmes in order to create a vibrant SME sector.

“The development of SMEs is a key condition in promoting equitable and sustainable economic development,” she added.

The training programmes, besides imparting financial knowledge, include lessons on how to fully use modern equipment and tap into international markets.

Local SMEs are the largest employer after Government.

The sector sustained the country in the decade of economic contraction when huge companies suffered and most folded.

According to figures from the United Nations (UN), the sector and other informal trades currently employ over 80 percent of the working population.

China, the world’s second largest economy, has a sound policy that supports the development of SMEs.

Labels: CHINA, CREDIT FACILITIES, SMEs

posted by MrK @ 5:26 PM