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Business Reporter—
The government will soon establish industrial parks across the country to provide formalised Small to Medium Enterprises (SMEs) with working and display space. Small to Medium Enterprises and Co-operative Development Minister Sithembiso Nyoni said the idea was borne out of her ministry’s realisation that in recent years, SMEs countrywide were facing shortage of working space.
“Our focus this year is to set up industrial parks for SMEs to address the challenges of working and display space. The industrial park concept offers the SMEs a space to produce their goods while on the other side providing space to display and sell their goods. One of the SMEs industrial parks will be established here in Bulawayo,” she said on Friday after touring a number of SMEs in the city.
Many SMEs have been kicked out of factory shells owned by local authorities after failing to pay rentals, a development which has crippled operations in the sector.
Minister Nyoni said her ministry wanted SMEs to graduate from small to medium and medium to large. The shift from small to medium or medium to large is expected to go a long way in enhancing entrepreneurial growth.
“We’re working on an awards and graduation ceremony where each province will be required to provide 50 SMEs for the award and graduation recognition. The award and graduation demands that SMEs come up with high quality products. Those that will be graduated from medium to large scale will have benefits such as improved access to funding from local banks,” said Nyoni.
“And as part of the formalisation process, my ministry is also working with banks so that the entrepreneurs can access funding.” During the tour, Minister Nyoni was told that funding was one of the major challenges hindering the growth of SMEs.
The tour saw the minister visiting companies such as Shoepack, New Era Adventures, Millennium Footwear, SMEs factories in Kelvin Industrial Site and Makokoba.
Over the years, the local financial sector has been reluctant to avail credit lines to the SMEs sector due to lack of collateral. The government has recognised the SMEs as an engine for economic growth. The sector contributes significantly to the country’s Gross Domestic Product.
It is estimated that about $7.5 billion is circulating in the informal sector hence the government wants to formalise SMEs.
Online Reporter