Chronicle Editor
By Enacy Mapakame in Nyanga
SMALL to Medium Enterprise and Cooperative Development Minister Sithembiso Nyoni says her ministry is pushing for a further reduction in cost of borrowing for the SME sector.
The Reserve Bank of Zimbabwe (RBZ) this year availed $100 million financing facility for the sector that can be accessed through a number of banks. The loans attract an interest rate of 10 percent per annum.
In a presentation made on her behalf at the Institute of Bankers of Zimbabwe (IoBZ) Summer School 2017 in Nyanga yesterday morning, Minister Nyoni said the 10 percent per annum interest rate was still very high for the SME sector and there was need to review it.
“I want to commend the RBZ for ensuring funding is available for SMEs and lowering the interest rate. However, I still think 10 percent is still very high for SMEs, we need to discuss on how we can bring this down,” she said.
Minister Nyoni said SMEs were still facing a lot of challenges with regards to accessing finance and markets for their products.
“Majority of them are involved in informal sector so they do not access funding easily due to perception that they are high risk but SMEs need to be assisted by banks,” she said.
Indications are that the sector also fails to access funding due to informality. Most informal SMEs have been reluctant to formalise their businesses to dodge tax payments.
Minister Nyoni, however, said negotiations were underway between the Ministry and the Zimbabwe Revenue Authority (Zimra) for tax incentives to boost the number of SMEs in the country.
This, she said, was another way of ensuring the sector’s participation to economic growth, as dodging taxes was tantamount to cheating the economy.
Online Reporter