By Simbarashe Muparaganda
Bulawayo, (New Ziana) – Treasury should increase financial support for the Small and Medium Enterprises (SME) sector to address persistent financing constraints that continue to hinder business growth and investment, the representative body for the sector has said. Zimbabwe Chamber of SMEs has said.
Speaking on the sidelines of a stakeholder engagement meeting on Tuesday, Zimbabwe Chamber of SMEs president Venancio Kurauone said the sector was a key contributor to the economy but continued to face growth constraints due to limited access to affordable, long-term financing.
“Treasury should establish dedicated funding mechanisms that would enable SMEs to expand operations, create jobs and contribute more effectively towards the attainment of Vision 2030.
“We firmly believe that we can rapidly achieve the goals of Vision 2030 by aggressively formalising and capitalising the SME sector,” he said.
He said deliberations at the inaugural National SME and Cooperative Indaba confirmed that small businesses contribute a significant share of the country’s gross domestic product and account for the majority of employment opportunities.
Kurauone, however, said lack of affordable financing continued to undermine the sector’s growth.
“The fundamental elephant in the room holding us back has always been the acute shortage of affordable, patient and long-term capital,” he said.
He bemoaned prohibitively high interest rates, short-term commercial lending and stringent collateral requirements, saying this has made it difficult for SMEs to access funding.
“Prohibitive interest rates, short-term commercial debt and collateral demands designed for large conglomerates have historically been a major stumbling block,” he said.
Kurauone made a direct appeal to Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, to increase fiscal support for the sector.
“We make a direct plea to the Treasury to allocate dedicated fiscal seed funding, back SME revolving funds and blended finance vehicles.
“Strengthening access to capital would enable thousands of small businesses to graduate into large corporations capable of driving Zimbabwe’s industrialisation agenda.
“We are small today, but the big corporates of tomorrow. Don’t think we will remain small. Tomorrow we are the conglomerates,” he said.
Kurauone said the chamber, which has structures in all 10 provinces, was committed to supporting government efforts to strengthen the SME sector through financial literacy, improved corporate governance and business formalisation.
He added that their organisation would continue supporting enterprise growth in sectors such as agro-processing, light manufacturing and logistics as part of efforts to accelerate provincial industrialisation and economic development.
“Entrepreneurs should embrace transparency and good corporate governance to improve their prospects of attracting investment and growing sustainable businesses,” Kurauone said.
New Ziana
