Loans to SMEs increase

Senior Business Reporter
THE value of loans disbursed by banks to Small and Medium Enterprises (SMEs) rose from $208,866 million in June last year to $211,02 million at the end of February, an official has said.
Addressing delegates during the SME banking summit in Harare recently, Reserve Bank of Zimbabwe acting Governor Dr Charity Dhliwayo said there was evidence in the market that some banking institutions had navigated around the well-known challenges facing SMEs in the country.

“In this regard, a number of banking institutions have established dedicated SME departments or units to provide customised financial services and capacity building to SMEs,” she said.

“Accordingly, the number of SMEs accessing loans from banking institutions increased from 5,658 as at 30 June 2013 to 9,067 as at 28 February 2014, representing a 60 percent increase.

“The value of loan disbursements also increased from $208,66 million as at 30 June 2013 to $211,02 million as at 28 February 2014.”
Dr Dhliwayo said loans and advances to SMEs constituted 6,02 percent of the total banking sector loans as at February 28, 2014, representing an increase from 5,57 percent as at June 30, 2013.

She said apart from the provision of funding to SMEs, banks also offer business advisory services short-term insurance; invoice discounting; support for trade exhibitions and capacity building through seminars.

“In addition, the banking sector has undertaken various strategic initiatives aimed at enhancing support to SMEs such as negotiating offshore lines of credit, introduction of viability-based lending; reduction of savings account charges, technical training of bank staff in SME financing,” said Dr Dhliwayo.

She encouraged banks to continue leveraging on technology to attain greater outreach and penetration while keeping the cost of providing financial services to a minimum.

“In this regard, we are pleased to note that as at 31 December 2013, a total of 3 million customers were registered for mobile banking services, a phenomenal increase from 1.7 million as at 31 December 2012. The total value of mobile banking transactions was $2,09 billion as at end of 2013, compared to $382 million as at end of 2012,” she said.