SMEs to get $20,000 loans each: Minister

Charity Ruzvidzo Business Reporter
SMALL to Medium Enterprises (SMEs) can borrow at least $20,000 each from the $3 million Arab bank fund to be disbursed next month, a Cabinet Minister has said. The loan facility was signed by Finance and Economic Development Minister Patrick Chinamasa and the Arab Bank for Economic Development in Africa (ABEDA) in Sudan last October.

The $3 million facility is meant to finance operations for micro, small and medium scale enterprises.

Responding to questions in Parliament last week, Minister of Small to Medium Enterprises (SMEs) and Cooperative Development, Sithembiso Nyoni, said the loan fund would transform operations of SMEs countrywide.

“The loan fund is open to all SMEs, the manufacturers and even those operating at small scale. SMEs will be able to borrow $20,000 per person. The disbursement is expected to kickoff in April,” said Nyoni.

A recent study conducted by the Bankers Association of Zimbabwe revealed that lack of funding was the biggest handicap for SMEs and urged the financial institutions to adopt a new approach of dealing with the sector.

The study also found that the informal sector suffers from negative perception with players considered as high risk as some of their activities are perceived as illegal in nature.

Minister Chinamasa recently described SMEs as the “new economy” that has largely become the bedrock of Zimbabwean economy in providing employment.

The government announced plans to put SMEs under Special Economic Zones (SEZ) based on the comparative advantage each region has in the economy.

A SEZ is a geographical region that has economic laws that are more liberal than a country’s typical economic laws. The objective of establishing SEZ is to attract increased investment.