Sedco, Westia Group sign funding MoU

Business Reporter
LOCAL equipment distribution company Westia Group last week signed a memorandum of understanding with the Small Enterprises Development Corporation that will see beneficiaries’ access equipment on credit from Westia while Sedco will provide working capital. The Westia Group is a wholly indigenous company and is an agent for a South African company called Zhauns which creates business opportunities for small enterprises. The pilot programme will avail an initial half-a-million dollars but the project is expected to avail more funding as the pilot programme is expected to be a success.

In a statement following the signing ceremony Westia Group managing director, Mr Paul Petros said every citizen of Zimbabwe is eligible to benefit under the arrangement whether for already established or start-up ventures.

“Under this agreement, every citizen of Zimbabwe who is running or is looking at starting a business is eligible while we are looking at empowering as many beneficiaries as possible.

“Clients will access equipment from Westia and working capital from Sedco in a lease finance arrangement. This will allow clients to pay for equipment over a period of 36 months instead of tying down valuable working capital in the cash up-front payment for the same equipment. A deposit will, however, be paid for each machine acquired,” he said.

Mr Petros said this is a move meant to empower and create employment for the citizens and assist the country’s new economic blueprint — Zim-Asset — bear fruit. He added that they had been working on this agreement with Sedco since 2011 prior to signing of the MoU last week.

Sedco general manager, Mrs Gladys Kanyongo said the move to partner Westia was meant to ease pressure on Government which has over the years financed SMEs through Sedco.

“This development comes as we have decided to take a different approach in mobilising funding for small business ventures since we understand that Government cannot do it alone.”

“The criteria of the pilot programme will be guided by the types of projects and their viability and also the value of the equipment the clients would want to acquire from Westia,” she said.

This would also determine how much money an applicant will be eligible to access. Mrs Kanyongo said they are optimistic the loan facility programme would grow so that productivity and the quality of products produced by the SMEs sector are increased while value addition is also promoted. She also said that the SMEs sector is now the largest employer hence the need to make available both financial and material resources so that they remain viable and sustainable.

The SMEs sector in the country is reportedly now accounting for about 90 percent of the country’s employable population and therefore in need for both Government and private sector assistance to secure funding.

Since the adoption of multi-currencies in 2009, most enterprises have been struggling to survive due to lack of long-term financing. The current liquidity constraints have also seen most financial institutions failing to provide long-term loans to their clients.