Online Reporter
Judith Phiri, Zimpapers Business Hub
THE Government’s ongoing review of the Small and Medium Enterprises (SMEs) Act has been applauded as a critical step to address gaps in Zimbabwe’s legal framework for SMEs policy and support programmes.
This will also ensure the new legislation aligns with the prevailing socioeconomic development, which requires a thorough analysis of the micro, small and medium scale (MSME) sector’s needs and policy gaps.
The evaluation will also benchmark the MSME programmes and interventions with regional and international best practices.
In an interview, Bulawayo Chamber of SMEs vice-chairperson, Ms Sithabile Bhebhe, called on MSMEs to fill out the survey being carried out in support of reviewing the Act.
“The MSME sector is a significant contributor to the country’s economic growth and development. The Government, through the National Development Strategy 1 (NDS1), identified MSMEs as key in contributing to the achievement of the nation’s industrial development,” she said.
“By participating and filling out the survey being carried out in support of reviewing the Small and Medium Enterprises Act (Chapter 24:12), they ensure their voices are heard and their challenges get addressed.”
She said the current Act, last amended in 2011, does not address digital businesses, e-commerce, or modern financing models such as crowdfunding.
Ms Bhebhe said other issues that need to be addressed in the Act include legally mandated lending quotas, collateral-free loans backed by Government guarantees and simplified processes for venture capital, among others.
Bulawayo businessman and Zimbabwe National Chamber of Commerce (ZNCC) Matabeleland Chapter past vice-president, Mr Louis Herbst, said the review was critical to address the challenges faced by small businesses and promote their growth.
“Once finalised, the Act will provide guidance and support to the MSME sector. It is important to address issues such as inadequate infrastructure, limited access to finance and cumbersome regulatory processes that hinder SME growth,” he said.
Youth Network Connect (YNC) managing director Mr Philimon Nyirenda, said financial support was critical for MSMEs.
“Most youths, who are MSMEs struggle with access to finance to grow their businesses. Financial institutions that provide loans for youth-led businesses and projects charge high rates, resulting in the youths shunning them,” he said.
He said there was a need for a clear framework as well for informal sector integration, to ensure inclusion of vendors and artisans, among other things.
The 2021 ZimStats MSMEs Survey estimated the number of MSMEs to be 3.4 million. The sector is also critical for inclusion as it employs more than 1.7 million people (Finscope 2022), and women-owned and led firms constitute more than 60 percent of total SMEs (Finscope 2022).
There has been a growing call for the Government’s legal and policy approach to support MSMEs respond to emerging trends in the economy, improve the operating environment, promote sustainable growth of the sector, and optimise its contribution to the attainment of National Development Strategy goals and priorities.
The World Bank’s Zimbabwe Private and Financial Sector Development Programmatic ASA (PFSD Pasa) is supporting the Government of Zimbabwe, including the Ministry of Women Affairs, Community, Small and Medium Enterprises Development (MWACSMED), in strengthening the private sector enabling environment, financial sector resilience and inclusion in the country.
