adminPlayers in the sector are yet to receive any form of support this year from the traditional sources of funding that include the Small Enterprises Development Corporation (Sedco) and the National Social Security Authority (NSSA).
SMEs Minister Mrs Sithembiso Nyoni last week said her ministry would engage the Ministry of Finance to release the funds to support struggling business operations. “We will be engaging the Ministry of Finance for funding to support our operations and the money, if secured, will be distributed to business projects that have potential to grow but are currently under-funded as well as support individuals or groups who want to start income-generating projects,” she said.
The Siyaso Home Industries complex in Mbare was recently burnt in a case of suspected political violence and the players are in desperate need of capital to re-establish operations. Stocks worth thousands of dollars were destroyed in an inferno that razed workshops to the ground. Minister Nyoni added that support for SMEs was crucial as a good number of Zimbabweans are informally employed thereby making the sector a vital cog in the drive to increase productivity and meet the recently set economic target of a US$100 billion economy by 2030.
The sector needs Government support as during difficult times SMEs have proved to be pivotal to the economy and have over the years proved that with robust support they can be a significant contributor to the country’s Gross Domestic Product (GDP) irrespective of the political climate, she said.
“If secured, some of the funds will be distributed through Sedco to enable the ministry to reach remote SME groups who are usually the most underprivileged group within the business circles as they have little or no access to loan facilities from financial institutions across the country. Government has been facilitating loans to SMEs over the years, thereby leading to the steady growth of the sector. Last year, rural entrepreneurs throughout the country accessed loans amounting to more than US$2 million from the ministry,” said Minister Nyoni.
To foster the continued financial support in rural areas the ministry is currently spearheading the transformation of credit and savings co-operatives into village banks in order to increase accessibility of affordable finance to emerging business.
Economic analysts contend that availing cheaper and meaningful finance to SMEs will go a long way in boosting their operations since the group has drive but lack proper funding. The sector, however, has the potential to grow to become the country’s biggest employer, particularly given employment within the formal sector is currently low.
According to figures from the United Nations (UN), the sector and other informal trades currently employ over 80 percent of the working population.
The world over, growth of small businesses has been openly encouraged as these are widely seen as the engine for economic growth. China, the world’s second largest economy, has a sound policy that supports the development of SMEs and Zimbabwe last year benefited immensely from the sixth-month-long Shanghai World Expo.-The Sunday Mail
Online Reporter