Zim to host SMEs banking summit

Oliver Kazunga Business Reporter
ZIMBABWE will next month host the inaugural Small and Medium Enterprises Banking and Microfinance Summit to discuss how they can be capitalised to promote economic growth. The summit is being organised by DEAT Capital, a Zimbabwean private sector advisory firm whose focal point among others is to raise capital and seeking out new business opportunities for Africa and Zimbabwean companies.
DEAT Capital managing director, Mr Nicky Moyo, said the summit would be held on 17 July in Harare.

“Small and Medium Enterprises (SMEs) in Zimbabwe play a vital role in economic development by increasing competition, fostering innovation, and generating employment. Africa and Zimbabwe, in particular, as in many other developing and transition economies, SMEs employ the largest share of workers. However, in Africa and Zimbabwe, these enterprises’ contribution to the Gross Domestic Product (GDP) is significantly lower than anywhere else in the world while they contribute to up to 50 percent of GDP for high-income countries, the percentage in Africa remains below 10 percent,” he said.

He said SMEs in Africa faced a number of challenges to growth, ranging from unfavourable macro-economic environments to administrative barriers and red tape. “Perhaps the biggest obstacle, however, remains their limited ability to access financial services.

“Additionally less than 20 percent of households in Zimbabwe have access to formal financial services, with low population densities, poor transport and limited communications infrastructure contributing to lack of supply in extensive regions of the continent,” said Mr Moyo.

He said even where such services were available, low-income individuals and small and medium businesses may have difficulties in meeting eligibility criteria such as strict documentation requirements or the ability to provide collateral.

He said those able to meet such demands may find they were still excluded from formal financial services by cost barriers, in the form of high transaction fees or substantial minimum requirements for savings balances or loan amounts.

Mr Moyo said lowering the barriers to access and offering suitable financial products could allow households and small businesses to maximise the leverage of their savings or earnings for increased productivity, contributing to higher incomes, job-creation and growth. In Zimbabwe, the unbanked market is estimated at more than $2 billion.

Speakers at the forthcoming summit will include Reserve Bank of Zimbabwe Governor Dr Gideon Gono, Bankers Association of Zimbabwe president Mr George Guvamatanga, South Africa’s MNCapital Group chief executive officer Mr Michael Ndinisa, the director of Centre for Inclusive Banking at the University of Pretoria Professor Gerhard Coetzee, Sub-Saharan Africa McKinsey & Company associate principal Mr Mutsa Chironga and Mr Terry Makhubele who is the head at the Credit Risk Assessment and Underwriting Export Credit Insurance Corporation of South Africa.