Banks, Zimra stifling SMEs sector growth

Banks, Zimra stifling SMEs sector growth
Published: 14 March 2018
The Zimbabwe Chamber of Small to Medium Enterprises has said government must in future not disburse any funding targeted at the SMEs through commercial banks as they do not understand the workings of the sector and are limiting its access to much needed financial support.

Government considers the country's SME sector as key as the formal sector, which dominated the economy, has shrinked over the years owing to economic challenges.

In its bid to aid the SME sector, now the biggest employer, Government has availed a number of facilities.

But SMEs chamber president, Daniel Chinyemba said the sector had in the past nine months failed to access a $90 million facility availed for the sector mid-last year.

"Government must disburse loans to SMEs through SMEDCO and not commercial banks because they do not understand SMEs," Chinyemba said.

SMEDCO, previously known as SEDCO is a parastatal under the SMEs ministry established in 1983 to, among other things, provide support, in the form of financial assistance, management counselling and training, information, advice or otherwise, to co-operatives and small commercial or industrial enterprises.

The institution has however largely struggled to deliver on its role due to under capitalisation.

Meanwhile, Chinyemba said the Zimbabwe Revenue Authority (Zimra) was also complicating the sector's compliance when it comes to paying taxes.

He charged that the revenue authority did not understand the workings of the sector and was treating them like big corporates.

"Zimra wants SMEs to behave like big corporate demanding financial statements to be presented by accountants," he said.

"Some of us managing these firms did not even complete our O-Level studies."

Zimra has in the past three years gone on a drive to encourage SMEs to formalise their operations, with over 13 000 having registered last year.

- New Ziana
Tags: Banks, Zimra,


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