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Harare Bureau
THE Small to Medium Enterprises Association of Zimbabwe (SMEAZ) has said lack of funds is hampering the progress of its business linkages programme meant to promote higher levels of business between SMEs and large corporations.
The Zimbabwe National Chamber of Commerce and SMEAZ signed a memorandum of agreement meant to foster greater collaboration between SMEs and large corporations in January this year.These linkages are expected to cover a wide range of areas such as procurement, distribution and sales, contract farming, franchising and leasing, sale of financial services, ICTs, outsourcing non-core functions and productive inputs and tools.
In a statement, SMEAZ said the it had been facing challenges in implementing the project due to lack of funds.
“We have since secured funding from an NGO to carry out an initial feasibility study and fund a pilot project.
“The only catch is that we need to raise 25 percent of the initial amount of $4 500 required for that initial feasibility study. The association currently does not have that money, and therefore the project is stalled,” SMEAZ said.
The association said while it had approached potential corporate sponsors for this amount, they had also decided to engage and involve members with a view to crowd-funding the initial amount.
Most SMEs are faced with many challenges in accessing funding or loan facilities from financial institutions because of a number of reasons mainly to do with collateral.
It has often been noted that most SMEs do not have bank accounts and are not playing their part in contributing towards the fiscus despite having the potential to lead the economic growth of the country.
The business linkages programme is expected to look at both the input side where SMEs supply large corporations with inputs for their core activities as well as the output side where they sell large corporations’ products.
“In view of the prevailing liquidity challenges, as well as concerns by large corporations over SMEs output quantities, quality and consistency, we decided to initially focus on output-side linkages since there were no concerns in that area, and the large corporations readily saw advantage in participating therein,” the association said.
The association said it would also set up distributorships meant for locally-manufactured products to be run by SMEs.
“These distributorships are solely meant for locally-manufactured products, including those of fellow SMEs. A template model would be set up which ensures accountability, continuous stocking and the participation of various players such as insurance firms and banks,” the association said.
Below the distributors, SMEAZ said there would be sub-distributors, retail shops, kiosks and even table-top sales.
In order to roll out the programme, the association said it would need to create a franchise brand and set up the business model.
“Thus, the model not only promotes Zimbabwean products, but also creates massive entrepreneurial and employment opportunities. We envisage that the smallest franchise will cost as little as $500 to capitalise, with the largest going into hundreds of thousands of dollars. Business opportunities will therefore be available for all,” SMEAZ said.
Online Reporter