ZCSMBA cautions over minimum wage revision
By Kabanda Chulu
Thu 20 Oct. 2011, 08:20 CAT
THE GOVERNMENT'S move to revise the current minimum wage should be done in an open and transparent manner whereby various economic sectors should be considered on the basis of its ability to pay, says ZCSMBA.
Commenting on the Presidential directive to the labour ministry to consider the issue of minimum wages, Zambia Chamber of Small and Medium Business Associations (ZCSMBA) vice-chairperson Dorothy Mulwila said the government should consider the various sectors and categorise them accordingly with the size of business being a major factor.
"We acknowledge government efforts in providing decent wages to Zambian citizens but it is important to remember that minimum wage across all sectors were revised and effected in January 2011 and the industry is still trying to adjust and cope with the cost and this has led to some industries to downsize labour force," Mulwila said.
"Hence it is our concern that further adjustment to the minimum wage will have both short and long-term effect on employment as the industry will not afford to carry on with the additional costs of doing business so any move to revise the current minimum wage should be done in an open and transparent manner in consultation with the private sector."
She said there was an impending danger of a blanket cover of minimum wage having a detrimental effect on the micro, small and medium enterprises (MSMEs) if the sector was not considered on the basis of ability to pay.
"MSMEs will not be able to bear the increase in the cost of doing business and may be forced out of business resulting in an increase in unemployment, thereby affecting the same persons whose livelihood was meant to improve. And in the absence of collective bargaining, many MSMEs may no longer be able to contribute effectively to the economy as engines of growth," said Mulwila.
"Some MSMEs are already struggling with the current minimum wage which when allowances are included is more than K419,000 and there are already cases of MSMEs that are no longer in operation due to the adjustments that had to be made when the current minimum wages came into effect in January 2011."
Labels: MINIMUM WAGE, SALARIES, ZCSMBA
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COMMENT - Excellent.
ZCSMBA urges mindset change on SMEs
By Kabanda Chulu in Kitwe
Wed 15 Dec. 2010, 04:00 CAT
THERE is need to change the mindset of people running Small Medium Enterprises (SMEs) for them to contribute to wealth creation. This is according to Zambia Chamber of Small Medium Business Associations (ZCSMBA) Copperbelt association representative Michael Sinkamba.
During a workshop on access to markets and finance training of entrepreneurs hosted by the Kitwe District Business Association, an affiliate of ZCSMBA and the Zambia Development Agency (ZDA), Sinkamba said SMEs’ quest for expansion was constrained by finances.
“Many financial institutions including banks claim that SMEs do not send adequate documents whenever they apply for credit ands to address this challenge we have partnered with ZDA and other institutions so that we explain how things should be done because skills training is important in every sphere of development,” said Sinkamba on Monday.
“This workshop will unlock the SMEs by changing their mindset so that they grow their businesses to result in wealth creation as well as contributing towards attaining economic development and the vision 2030 of becoming a middle income country.”
The training workshop which ends on Friday has drawn various entrepreneurs in the region and participants are expected to acquire knowledge on book keeping, preparing a business plan, sourcing business from corporate entities and taxation registration requirements.
Labels: PETER SINKAMBA, SMEs, WORKSHOPS, ZCSMBA
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State committed to SMEs’ productivity
By Times Reporter
THE Government will address the needs of small and medium enterprises (SMEs) and enhance their productivity,Vice-President George Kunda (right) has said.
Mr Kunda said in Lusaka yesterday that the Government would continue allocating resources to relevant entities for SMEs’ empowerment in order to increase their contribution to the country’s gross domestic product (GDP).
Mr Kunda said this when he opened the Third Association of Chartered Certified Accountants (ACCA)/Zambia Chamber of Small and Medium Business Association (ZCSMBA) SME conference.
He said because of the great importance the Government attached to SMEs, it established the Zambia Development Agency and the Citizens’ Economic Empowerment Commission to stimulate economic growth.
“Government will continue to allocate resources to these entities so that our people can be empowered more and realise their aspirations in their quest to grow their business and contribute to higher GDP.
“In addition, Government is currently reviewing policy frameworks to ensure that they address the current needs of the SME sector,” he said.
Mr Kunda called for innovation among the business community in order to cope with the demands of the current economic trends.
He said that the Government was committed to developing policies and institutional frameworks which would contribute to a conducive environment for growth and transfer of ownership in line with international standards.
He emphasised the need for the business community to engage in e-business and keep up with the new technological era in which digital facilities were actively in use.
Earlier, Commerce Trade and Industry Minister, Felix Mutati challenged the SMEs to take advantage of the opportunities the Government was creating.
ACCA deputy president, Brendan Murtagh said his association would continue supporting the Zambian SMEs to ensure growth.
Mr Murtagh said the SMEs needed to fully understand accounting regulations, hence the conference which has now become an annual event facilitated by the ACCA.
In his vote of thanks, ZACSMBA executive secretary, Maxwell Sichula hailed the Government for ensuring the smooth growth of the SMEs in the country.
Labels: ACCA, BRENDAN MURTAGH, FELIX MUTATI, GEORGE KUNDA, SMEs, ZCSMBA
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SME policy under review - Kunda
By ANGELA CHISHIMBA
VICE-PRESIDENT George Kunda says Government is currently reviewing the policy framework of Small and Medium Enterprises (SME’s) to ensure they address the current needs of the sector.
“We will in due course launch the new SME policy which will enhance how we are developing this sector,” Mr Kunda said.
He said today’s businesses operate in a world that is increasingly becoming sophisticated and complex compounded by increased technological advancement.
Mr Kunda said this in Lusaka yesterday when he officiated at the ACCA and Zambia Chamber for Small and Medium Business Association (ZCSMBA) Annual Small and Medium Enterprises Conference.
Mr Kunda said there is need to focus and direct resources to meaningful research and development that will facilitate the invention of new tools, methods, processes and approaches in order to optimize performance and improve productivity.
Mr Kunda said Government is committed to developing public policies and institutional frameworks that contribute to a business environment that is conducive to entrepreneurship and facilitates entry, growth and transfer of ownership which are coherent at international, regional and local levels.
He said Government is committed to ensure that businesses in Zambia remain competitive and more productive “in these unprecedented difficult economic times affecting the whole world”.
“This explains why the government established two key organisations namely the Zambia Development Agency and the Citizens Economic Empowerment Commission both dedicated to promoting local investment in order to stimulate economic growth,” Mr Kunda said.
He said Government will continue to allocate resources to the two entities so that people can be empowered more and realise their aspirations in their quest to grow their businesses and contribute to higher Gross Domestic Product (GDP).
Mr Kunda said through the entities and other avenues, government will continue to allocate financial resources to foster growth.
He appealed to SME owners and managers and all entrepreneurs to seize the opportunity to be more creative and innovative in their business approaches and strategies such as financial management, taxation, credit control and debt management.
Mr Kunda also urged Zambian business owners to embrace e-business.
“Through the strategic utilisation of e-business within and outside the company’s environment, we expect small businesses to enhance productivity and efficiency and at the same time create new business opportunities and change the way businesses relate to each other,” he said.
Mr Kunda said e-business is swiftly changing the way of doing business and is increasingly having an influence on economic growth in the years to come.
He commended ACCA for supporting the SME sector through its learning and development, research and consultancy initiatives in partnership with ZCSMBA.
Mr Kunda said last year ACCA signed a memorandum of understanding with Zambia Institute of Chartered Accountants (ZICA) and Eastern, Central and Southern Africa Federation of Accountants (ECSAFA), to provide audit monitoring services to ZICA which he hopes will enhance the quality of audit work and improve accountability and transparency in Zambia.
And Minister of Commerce, Trade and Industry Felix Mutati urged the SME sector not to bemoan the financial crisis but turn it into an opportunity.
“We are all affected by this crisis but we need to get up and seize this opportunity,” he said.
ACCA deputy president Brendan Murtagh said SMEs play a key role in the development of businesses.
He said SMEs need to be supported if the economy is to recover at a fast rate.
Labels: ACCA, GEORGE KUNDA, SMEs, ZCSMBA
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Sichula notes positive change in govt’s attitude towards SMEs
Written by Chiwoyu Sinyangwe
Monday, March 02, 2009 2:30:08 AM
THE government has now started listening to the demandsof small entrepreneurs, Zambia Chamber of Small and Medium Business Association (ZCSMBA) chief executive officer Maxwell Sichula has observed.
Closing a five day Zambia Development Agency (ZDA) organised seminar on Business Plan preparation in Lusaka on Friday, Sichula said the recent draft policy on small and medium-sized enterprises (SMEs) and the recently launched Citizens Economic Empowerment (CEE) Fund were some of the government’s response to the cries of local entrepreneur.
Sichula also observed that no matter how much foreign direct investment came into the country, Zambia would only be developed by local entrepreneurs.
“Government is now listening to us. The last two to three years, we have made so much noise in terms of lobbying and this has been sufficient because we are seeing government responding more,” Sichula said. “The draft policy which now is with Cabinet will create a legal framework where we can develop and promote this sector.”
Sichula however observed that commercial banks were still averse when it came to offering their services to small and micro entrepreneurs.
He said ZCSMBA was optimistic that the CEE Fund would help to bridge the vacuum in finance created by commercial banks.
“The banks are not interested in working with you as long as you are a small business. Now the CEEC has a fund to help you grow,” he said.
Sichula also implored the participants to put into practice the knowledge gained from the workshop.
He also called for collaboration among entrepreneurs in similar fields to avoid creating unnecessary competition among themselves.
Sichula also observed that local entrepreneurs lacked as much knowledge on business plans as the funds itself.
And ZDA director for micro and small enterprises division Windu Matoka said the agency was this year targeting to train an increasing number of Zambians venturing into entrepreneurship.
Matoka, who was the focal person for the seminar, said ZDA was ready to provide the platform and that participants only needed to pay towards logistics.
Matoka also said micro and small enterprises division had this year alone trained over 100 local entrepreneurs in business management skills.
The five day workshop drew participants from about 35 existing local entrepreneurs from some selected parts of the country.
Labels: CEE, MAXWELL SICHULA, SMEs, WINDU MATOKA, ZCSMBA, ZDA
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ZCSMBA urges govt to support SMEs
Written by Chiwoyu Sinyangwe
Tuesday, January 27, 2009 4:52:27 AM
POVERTY levels in the country have continued to increase because there is a missing link between big businesses and small and medium entrepreneurs (SMEs), Zambia Chambers of Small and Medium Scale Business Associations (ZCSMBA) has observed.
ZCSMBA executive secretary Maxwell Sichula also regretted that
the SME sector in the country continued to be getting more support from the donor agencies than the government.
Sichula, however, welcomed recent efforts by the government to develop a draft SME policy which was currently with cabinet, saying the move would give the sector a framework and strategic direction.
He also called for the speedy approval and implementation of the SME policy by cabinet.
“We have a long way to go in terms of addressing the SME sector which is the link between the big boys and the SMEs, and unless we address that missing gap, then I am afraid we will continue to wallow in abject poverty,” Sichula said.
“If the government does not support the SME sector, who will do it? We need to get our members of parliament to be serious, get the cabinet and all decision makers to do what is required in order to get the SME sector in Zambia moving. If it weren’t for the cooperating partners, the little that is being done to support this sector would not have taken place.”
Some of the cooperating partners that currently support the local SME sector include USAID, Netherlands, the Finnish Embassy and the European Union.
And Sichula also observed that despite most financial institutions in the country introducing products aimed at the SME sector, the initiative did not benefit the members of ZCSMBA owing to the irregularities in terms of classifying the SMEs by the commercial banks.
“Our financial institutions talk about developing products that are intended for this sector, but when you actually go to them, you find their understanding of the SME is totally different,” said Sichula.
“I think we have to agree that when we talk about SME, we are talking about not an orange and not an apple and that way, whatever programme they will come up with, they will be addressing the same clientele.”
Labels: MAXWELL SICHULA, SMEs, ZCSMBA
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2008 was a successful year for entrepreneurs, observes Sichula
Written by Nchima Nchito
Thursday, January 01, 2009 8:07:34 AM
ZAMBIA Chamber of Small and Medium Business Associations (ZCSMBA) executive secretary Maxwell Sichula has described 2008 as a successful year for entrepreneurs.
In an interview, Sichula said 2008 had been marked by positive events in terms of entrepreneurship.
“The African Capacity Building Foundation Project is a good example. Though this was signed last year (2007), implementation only begun in 2008,” Sichula said.
He said this was a US $1.7 million (about K8.3 billion) project which was meant to build capacity among member organisations.
“The year was also characterised by support from the state, stakeholders and other cooperating partners,” he said.
“We had the Ministry of Commerce sponsoring some SMEs to travel to Malaysia to attend fares there so as to get exposure and develop contacts.”
Sichula added that the International Labour Organisation (ILO) in conjunction with other cooperating partners had also launched a K24 billion project for SMEs.
“Under the business development voucher scheme which is a three-year programme, resources have been committed to develop the supply and demand side of business,” he said.
Sichula further said his organisation had also managed to secure funding from the International Finance Corporation (IFC), a World Bank financing arm, to fund three programmes and a memorandum of understanding (MoU) had been signed to that effect.
He however said the association had faced numerous challenges faced during 2008 as well.
“One of the biggest challenges we faced is market access. Some of our members found it very hard to access markets for their products,” he said. “In cases where they did manage, they had to face stiff competition from cheap and inferior imports.”
Sichula said the problem of accessing finance, though spoken of frequently, still posed a serious challenge.
“Granted, we are seeing many commercial banks coming to the aid of SMEs, like Finance Bank with the Twikatane scheme, there is still a lot that needs to be done if SMEs are to have the capital required to develop their businesses,” said Sichula.
“For 2009, my organisation will be working to solidify the advances made in 2008 and ensure the successful implementation of the various projects.”
Labels: MAXWELL SICHULA, ZCSMBA
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Falling copper prices have had an impact on small businesses – Sichula
Written by Nchima Nchito
Friday, December 05, 2008 11:41:41 PM
ZAMBIA Chamber of Small and Medium Business Association (ZCSMBA) executive secretary Maxwell Sichula has said falling copper prices have had an impact on small business in the country.
In an interview, Sichula said the SMEs, just like the rest of the economy, had not been spared by the decline in copper prices as some small businesses depended on mines for their survival.
“It has a tremendous effect on the entire economy including our SMEs. We have witnessed a fall in income generation all round,” he said.
Sichula added that some of his members where suppliers of various products and goods to the mining companies and the falling copper prices meant that there were less activities going on among suppliers of products to the mines.
“The problem of falling copper prices is compounded by the depreciation of the kwacha against the US dollar, making it very difficult for those of our members whose businesses comprise of importing products to resell within the country,” he said.
Copper prices have hit the lowest since 2005, with a tonne of the commodity being quoted at below US $4,000.
And Sichula has advised the government to establish structures and institutions that support entrepreneurship.
In an interview, Sichula said the establishment of supportive structures and institutions for entrepreneurs was important for capacity building among Small and Medium-scale Enterprises (SMEs).
“We need to empower as well as to build capacity. That is why we need to identify institutions that are going to organise SMEs together,” he said.
Sichula said while his organisation appreciated the efforts and work of institutions such as the Citizens Economic Empowerment Commission (CEEC), there were major limitations faced by the institution.
“Giving loans to individuals will have less trickledown effects in terms of benefits than if the loans were given to institutions with proper structures to embark on business,” he said. “We are just scratching the surface, there is so much that needs to be done.”
Sichula, however, acknowledged the efforts of the government in supporting SMEs.
“I am delighted that now we are seeing a deliberate government policy directed towards SMEs,” said Sichula.
Labels: CEEC, COPPER, MAXWELL SICHULA, SMEs, ZCSMBA
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Sichula demands quality products in textile industry
By Mutuna Chanda in Kitwe
Wednesday August 13, 2008 [04:00]
ZAMBIA Chamber of Small and Medium Business Associations (ZCSMBA) executive secretary Maxwell Sichula (above) has challenged small-scale textile manufacturers to improve the quality of their products to compete against smuggled goods. In an interview on Sunday, Sichula said the Copperbelt Province and other areas along the line of rail were a huge market for smuggled manufactured articles from the Democratic Republic of Congo (DRC).
"Those of our members in small-scale textile manufacturing are facing competition from smuggled chitenge materials for example from DRC," Sichula said. "The Copperbelt due to the increased economic activities is a huge market for chitenge material and salaula (second hand clothes) from DRC and other areas. And this is not unique to just the Copperbelt we have also seen trends in areas along the line of rail for example our colleagues from Zimbabwe are smuggling goods into the country and some of what they smuggle is stretching out to the Copperbelt. So our members have to work hard to improve on the quality of what they manufacture so that they face up with competition."
Sichula said small and medium business enterprises needed to lobby the government to urgently tighten border controls so that unfair competition could be dealt with.
"Our members need to make a lot of noise directed at the government to improve the border security situation to curb smuggling," Sichula said.
"If there's efficiency at the border and smuggling is minimised, even the government will benefit as they will increase their earnings through duty."
And Sichula said the officials from the Chililabombwe District Business Association were in touch with their Congolese counterparts on modalities of increasing trade between Zambia and DRC.
"We have been building a warehouse at Kasumbalesa for members to use for exports to Congo," said Sichula. "The Congo is a huge market for Zambian products especially food products.”
Labels: MAXWELL SICHULA, QUALITY ASSURANCE, ZCSMBA
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Sichula challenges SMEs to build capacity
By Kabanda Chulu
Friday August 01, 2008 [04:00]
ZAMBIA Chamber of Small and Medium Business Association (ZCSMBA) executive director Max Sichula has challenged Small and Medium Enterprises to
build capacity before establishing linkages with foreign investors. In an interview during the Smart Partnership Dialogue conference, Sichula said his organisation was using the forum to share its experience and also to learn from the successes of other countries.
“As much as we need linkages with foreign companies, a lot of effort is required to be done especially in the areas of governance and business management because at the moment, not all companies are on equal footing hence they can’t enter into such arrangements since they are weak, small and fragile,” he said.
Sichula said the ZCSMBA, which has 48 member associations across the country, was intending to attract foreign investors that would help local companies add value to their exports.
“This country is rich in various natural resources that can cater for almost all the sectors of the economy but we are lacking value addition hence exporting raw materials but through dialogue, we want to learn from our colleagues how they have managed to overcome the challenges facing the SMEs and how they have managed to grow the industry,” he said.
Sichula also expressed optimism that financing for SMEs would improve in the country following the increasing interest by several commercial banks to develop various financial products suitable for the sector.
Labels: MAXWELL SICHULA, SMART PARTNERHIPS, ZCSMBA
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Analyse alternative fuel sources, advises ZCSMBA
By Joan Chirwa
Monday June 23, 2008 [04:00]
THE development of alternative fuel sources should be looked at critically as oil prices continue to rise on the international market, associations of small businesses have advised. The associations have noted that small businesses in Zambia (an oil importing country) would be the worst hit by rising fuel costs.
The Small-Scale Industries Association of Zambia (SSIAZ) and Zambia Chamber of Small and Medium Business Associations (ZCSMBA) indicated that weak economies in the region would find it difficult to compete on markets due to rising costs of production.
“The cost of inputs in any production process pushes up the cost of doing business. Fuel is a major input in production for any sector and once the price goes up, operations of several businesses are negatively affected,” said ZCSMBA executive secretary Maxwell Sichula. “Ultimately, an increase in production costs will be passed on to consumers and this is what has been happening. We need fuel to transport raw materials; we need fuel to transport finished products to markets, so all the production costs businesses incur will be factored into the final cost of a product on the shelves.”
Sichula said the development of the bio fuel sector would act as a long-term measure to rising costs of fuel.
“We have plenty of land which can be utilised to grow crops like jatropha and others for bio fuels,” Sichula said. “This needs to be taken seriously.”
However, increasing needs for bio fuels worldwide have been linked to the current food shortages.
Developed countries like the USA and UK have increased production of corn for bio fuel use, a situation that experts say has led to unprecedented rise in food crops as well as agricultural inputs such as fertiliser.
And President Levy Mwanawasa has advised farmers in the country to largely concentrate on food crop production while cultivating energy crops at a small-scale level to avoid possible food shortages in the country.
And SSIAZ president Mukuka Nunkwe asked the government to cushion the rising costs of fuel by either maintaining a subsidy on the commodity or reviewing the tax structure.
Labels: BIOFUELS, FARMERS, SSIAZ, ZCSMBA
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ZCSMBA calls for the building of small business
By Nomusa Michelo
Monday December 17, 2007 [03:00]
ZAMBIA Chamber of Small and Medium Business Associations (ZCSMBA) chairperson Timothy Siakaziba has said there is need to build the small sector business operators in order to foster development. In an interview, Siakaziba said small business operators were an important part of Zambia’s economy and should be supported. “The development of this economy lies in the hands of the formal and small sector operators,” he said. Siakaziba said ZCSMBA had received funding for capacity building in entrepreneurial and business management skills and processing for its members.
“We got the Africa capacity building funding, who are funding us for the next four years involving US$1.7 million,” he said. “We also have had money that we have got from TEVETA (Technical, Entrepreneurial and Vocational Education and Training Authority) and just in the course of this year we signed for close to K400 million for capacity building in terms of entrepreneurship and other business management skills among our members especially in processing and manufacturing.”
Siakaziba said the association had received good support from cooperating partners to support business development. “Recently we received funding from the Royal Netherlands Embassy, and the Government of Finland which is going to support the business development services which is called the voucher system,” he said.
He said the voucher system would be done in partnership with the government through the Zambia Development Agency (ZDA). “The main beneficiaries are ZCBSMA and Zambia, National Farmers Union (ZNFU),” he said. “We are starting to pilot these business development services for ZCSMBA in Mazabuka in the course of this year after we have secured the fund manager.
Labels: ECONOMIC EMPOWERMENT, ECONOMY, SMEs, TEVETA, ZCSMBA, ZDA, ZNFU
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Empower local entrepreneurs in mining sector, Sichula urges govt
By Fridah Zinyama and Kabanda Chulu
Friday August 03, 2007 [04:00]
ZAMBIA Chamber of Small Medium Business Associations (ZCSMBA) executive secretary Maxwell Sichula has urged the government to find ways of empowering local entrepreneurs in the mining sector saying foreign investors will leave when copper prices go down. And former Zambia Manufacturers Association (ZAM) vice-president Oswald Mwewa has said if given correct financial backing, the Citizens Economic Empowerment (CEE) Act will be implementable.
Meanwhile, in his message to the 81st Zambia Agricultural and Commercial Show which opened yesterday, President Levy Mwanawasa admitted that past economic policies had failed to address poverty levels and unequal distribution of wealth among local citizens. Commenting on the economic performance during the first half of this year, Sichula said several macro-economic indicators were moving in the right direction showing that Zambia’s economy was improving.
"The economy is going in the right direction when looking at the number of investments in key sectors such as mining, manufacturing, tourism and agriculture but the biggest challenge is that all these major developments are in foreign hands," Sichula said.
"It is not a grudge but a reality because very little is trickling down to ordinary Zambians. We want to see more local entrepreneurs getting empowered so that they stake their prowess in their own economy and foreigners should just top up and the government should find ways of doing this since you cannot rely on foreign investors when copper prices goes down."
He said Zambians were the only ones who could be able to sustain the current positive developments obtaining in the economy.
"There is no reason why we cannot sustain these achievements because local entrepreneurs have the capability to develop and drive this economy forward since all their profits will be retained locally," said Sichula.
And Mwewa said the CEE Act was a very good document but it would not help in empowering Zambians unless there was financial backing supporting it.
"As someone who was part of the committee set up to help come up with the CEE Act, I feel that government will only be able to successfully implement the Act if it avails resources to the citizens," he said.
Mwewa said availing finances to the citizens would go a long way in helping them to invest in major sectors of the economy.
"How can anyone who has good ideas contribute favourably to the economy unless they have access to finances?" he wondered.
Mwewa said one of the greatest challenges that most Zambians seeking to embark on business ventures have been experiencing was lack of adquate financing.
"If government, using the CEE Act, avails finances to the public, it will enable most citizens to embark on feasible business ventures that can contribute to sustainable economic development in the country," said Mwewa.
And President Mwanawasa said that government had an obligation to redress and remove various inequalities in the economy hence the creation of the Citizens Economic Empowerment (CEE) Act.
"The growth and development of the country cannot be attained without the participation of the citizenry. Therefore, the CEE Act is a tool for wealth creation and employment generation by integrating economically disadvantaged citizens into mainstream economy," said President Mwanawasa.
Labels: CEE, MAXWELL SICHULA, MINING, SMEs, ZCSMBA
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Businessmen rap commercial bank
By CHIWOYU SINYANGWE
COMMERCIAL Banks last week came under fire from local entrepreneurs who accused them of preventing Zambia from benefiting from the Africa Growth Opportunity Act (AGOA). During a Breakfast Get Together meeting organised by the Zambia Chamber of Small and Medium Business Associations (ZCSMBA) at Taj Pamodzi Hotel in Lusaka, commercial banks were urged to be responsive to needs of local entrepreneurs. Joy Mwambazi, proprietor of Tianshi Distributors said her company in 2003 was offered a contract to supply hospital uniforms to the United States under AGOA but failed because Zambia National Commercial Bank (ZNCB), her bank by then, delayed to release US $27,000 to cover for shipping of raw material despite producing a letter of credit.
Mrs Mwambazi explained that Zambia's exports through the AGOA suffered because the deal her company clinched was a test project for the country's capability to fulfill contractual obligations. She said not only did Zambia lose the contract to a named country but her company was fined by the US based company who contracted them for failing to honour the contract. "ZNCB managers refused to approve only US $27,000 we needed to pay for the raw materials from Pakistan even when we had a letter of credit.
And this deal was our opener to AGOA and was worth US $100 thousand a month which was to run for 3 years with direct employment of 50 other entrepreneurs who in turn would have employed other people. Now the container for raw materials was diverted to Lesotho and as I speak that country is benefiting from AGOA at our expense," Mrs Mwambazi said. And ZCSMBA executive secretary Maxwell Sichula who confirmed the incident expressed disappointment at the failure of most commercial banks to support growth of local entrepreneurs.
Mr Sichula called for reform in the manner commercial banks disbursed funds to his members to enable them contribute to poverty alleviation, creation of wealth and employment in the country. He explained that his organisation fought so hard for the AGOA deal to the extent of 'camping' at the office of Commerce, Trade and Industry permanent secretary, Davison Chilipamushi, who is also ZNCB board chairman , but lamented that by the time the bank's managing director, Mr Likolo Ndalamei authorised the release of the money it was too late. "Joy's case is not the only one, we have so many cases were banks are just proving difficult to help our member improve their businesses despite banking with these same banks. Right now we are also pursuing another case with Barclays Bank about our member who is a glycerine manufacturer and needs money to expand his business," Mr Sichula said.
Another participant Steady Sinkala, proprietor of Stechas Financial Services who labelled commercial bank managers as 'mere front-line staffs' said most managers in commercial banks did not have power to sanction the release of funds to their clients but failed to tell their clients the truth.
But ZANACO manager for marketing and product development Levy Nkoya who apologised for his bank's inefficiency in the failed AGOA deal called for harmonisation of operations between ZCSMBA with banks to avoid similar disappointments in future. Mr Nkoya explained the decision to only the release funds upon the approval of managing director was in line with new banking practices approved by Bank of Zambia claiming that in past some bank managers had abused that privilege.
Stanbic Bank manager for business banking David Katepa also offered the same explanation and urged the meeting to form alliances such as ZCSMBA saying sometimes banks found it riskier to deal directly with individual entrepreneurs who he said some had in the past abused loan facilities.
Labels: BANKING, SMEs, ZANACO, ZCSMBA, ZNCB
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