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Lovermore Zigara, Midlands Correspondent
THE government has signed a memorandum of understanding with a financial institution, which will expedite plans to transform the Small Enterprises Development Corporation (Sedco) into a bank to provide lending to SMEs.
Speaking during a tour of SMEs that are into manufacturing in Gweru yesterday, SMEs and Co-operative Development Minister, Sithembiso Nyoni accused banks of refusing to lend money to upcoming businesses.
She said what was surprising was that the big corporates that banks were lending money to were the biggest defaulters.
“The challenges facing SMEs are similar globally as banks the world over don’t trust small entrepreneurs despite the fact that many of them especially those run by women always pay back borrowed funds,” said Nyoni.
She said it was because of this realisation that her ministry was mobilising resources to set up an SMEs bank.
“ We’ve already signed a memorandum of understanding with another company that is going to help us mobilise resources and set up systems for Sedco to have an SME bank,” she said.
Minister Nyoni could, however, not divulge the name of the investor for confidentiality reasons nor the time frame saying the issue was being dealt with by the Ministry of Finance and Economic Development and the Reserve Bank of Zimbabwe.
She said if all goes well the bank should open in July.
Once the SME bank is set up entrepreneurs who are into manufacturing will be given first priority, which is in tandem with the government thrust of promoting value addition and beneficiation.
Turning to the issue of the punitive tax regime, Minister Nyoni said her ministry was in constant engagement with the Zimbabwe Revenue Authority with a view of lowering presumptive tax, which will go a long way in formalising the SMEs sector.
She said in order to promote SMEs businesses, government had crafted a policy that will ensure that 25 percent of all government procurement is done by SMEs.
Online Reporter