MSMEs need financial support to grow – SEATINI

The Southern and Eastern African Trade Information and Negotiations Institute (SEATINI) said on Tuesday facilitating access to legitimate financing channels such as micro credit could be the first step to enable informal entrepreneurs to move towards formalization and recognition.In 2013, a FinScope survey found that there were at least 2.8 million micro, small and medium businesses operating in Zimbabwe with 85 percent of them being unregistered, employing at least 5.7 million people and generating an estimated turnover of $7.4 billion.

Speaking at capacity building workshop for the Clothing and Footwear Small to Medium Sized Enterprises (SMEs) in the capital, SEATINI board chairman Collen Gwiyo said the informal sector was very significant in its contribution to the development of the Zimbabwean economy.

The workshop was aimed at capacitating the textile, clothing and footwear sectors to handle and manage their own funds so that they can be able to firstly move from informal, to SMEs and to the formal sector.

“Given their significance in the economy these businesses should be assisted by the relevant stakeholders to graduate from informal to

formal sector,” he said.

The informal sector players could have a few resources in isolation but could be a formidable resource when combined. Through the assistance and recognition their knowledge can be a meaningful investment to the country,” he said.

Mr Gwiyo said the clothing and footwear sectors were among the critical ones with growing volumes of informal employment in Zimbabwe.

He said the sectors were willing to formalize but they first needed assistance because there was a lot involved in the process.

“Formalizing means taxation, that is the issue number one, and I was discussing with them saying in order for them to formalize they also want incentives, small loans, things like that. Once they get small loans already the have begun a process of formalizing because

there are stages followed in terms of paying back so once that happens they have no problem with that,” Gwiyo said.

Between 2011 and 2014 about 4 610 companies closed down affecting 55 443 workers.

The informal sector has contributed to poverty alleviation and reduced individual and household vulnerability. – New Ziana.