The Ministry of Small and Medium Enterprises and Cooperate Development has called on financial Institutions to partner with government in mentoring Micro, Small and Medium Enterprises (MSME) on good corporate governance, financial literacy to capacitate them to diligently handle finances and run their businesses efficiently and effectively.
Addressing the fifth Zimbabwe SME Banking and Micro Finance Summit in Harare last week, Minister of Small and Medium Enterprises and Cooperative Development, Dr Sithembiso Nyoni said government through the central bank has capitalized the Small to Medium Enterprises Development Corporation (SMEDCO) with $15 million worth of treasury bills for on-lending to the sector.
“Government through the central bank has also managed to capitalize SMEDCO with $15 million worth of treasury bills for on-lending to the sector including retrenches from large enterprises and government departments, these treasury bills are expected to go a long way in addressing the funding needs in the sector.
“Of late the Ministry has been championing the formation of Savings and Credit Cooperative Societies (SACCOS) as a conventional method of sourcing affordable finance by MSMEs who is failing to acquire funds from the mainstream financial systems.
“In this regard the Ministry has partnered with development partners such as UNDP and ILO among others who are providing grants to these SACCOs as affordable loans to boost their capital base. Repayment of these loans has seen the Ministry creating a revolving fund for on-lending to other SACCOs”, she said.
Nyoni also said the Ministry is working with financial institutions lobbying for services that satisfy the needs and requirements of the sector.
“Although RBZ has intervened on the interest rates, cost of money has remained relatively high and thus left most MSMEs unable to borrow from this market.
“For a win-win situation there is need for banks to have confidence in MSMEs and avail cheaper products as the country is increasingly becoming reliant on the sector,” said Nyoni.
Reserve Bank of Zimbabwe on the 5th of May 2017 availed US$90 million towards the National Financial Inclusion Strategy which is targeted at improving access to finance by the MSME sector.
From the US$90, cross boarder sector got USD15 million, while the gold support facility got USD40 million.
USD15 million went to the women empowerment fund USD15 million with horticulture facility getting USD10 million and business linkages facility receiving USD10 million.