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Government plans to engage big companies on the possibility of opening micro finance institutions to capacitate small to medium enterprise companies for them to start making a meaningful contribution to the fiscus.
Plans are also underway to formalise the sector in a bid to put SME’s on the radar of the taxman.
Addressing business executives at a breakfast meeting in Harare yesterday, Small and Medium Enterprises and Cooperative Development Permanent Secretary Mrs Evelyn Ndlovu said big companies should engage the informal sector to tap into the money currently circulating there.
“Big corporations interested in the SME’s sector should start engaging the sector seriously through capacitating them considering that funding has been a major challenge.
“We have witnessed great potential in the small and medium enterprises section of the economy hence the need for big companies to tap into the money currently circulating in that sector,” said Mrs Ndlovu.
She said Government is working towards formalising the informal sector through engaging company registration authorities and the Zimbabwe Revenue Authority.
This move is set to create an environment conducive for doing business amongst the SME’s.
Mrs Ndlovu said Government is at the moment engaging the Registrar of companies and Zimbabwe in trying to create an environment conducive for SME’s.
“Despite the important role of financial institutions, local SMEs are facing numerous obstacles in meeting their full potential therefore affecting their meaningful contribution to the economy. For revenue authorities, the new businesses present a cash cow.
“Big companies should emulate Econet Wireless which introduced Ecocash which has become a centre of all SME’s transactions,” she said.
Banks are usually the first port of call as SMEs embark on their growth paths, and are concerned with the financial performance of SMEs.
However British American Tobacco managing director Mr Lovemore Manatsa said both companies and banks should come on board in capacitating SME’s. He said Zimbabwe is no longer a bulk economy ever since it adopted the multicurrency regime.
“As witnessed during the yesteryears, we used to have a bulk economy but that has since changed considering that SME’s now have followed their own type of business of breaking bulk to meet the demands of every segment of the society.
“It’s high time that other companies engage and capacitate the informal sector so that it starts contributing to the fiscus,” said Mr Manatsa.
About 95 percent of the MSMEs constitute most of the informal sector providing most opportunities for employment. The current economic climate characterised by a weak manufacturing sector, lack of cheap funding and low foreign direct investment has resulted in a burgeoning micro-enterprise economy in Zimbabwe’s major cities, a development that economists say shows how the environment has shifted into trading.
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