Source: Government to avail $500m for entrepreneurs | The Herald December 19, 2019
Michael Tome and Chipo Chaumba
GOVERNMENT says it will be availing the $500 million national venture fund by February 2020 meant to provide affordable loans to young entrepreneurs.
Finance and Economic Development Minister Mthuli Ncube, revealed this at the launch of the Pfuma Inotho, a small to medium enterprises funding and listing platform on Finsec.
This is a digital listing platform that enables qualifying SMEs to raise capital on the stock exchange, a development that is anticipated to provide “patient capital” for budding businesses.
Launch of this platform is one way in which the Zimbabwean capital market will stimulate growth and diversification from focus on blue chip and established corporates to also include SMEs.
The fund aims to foster support to entrepreneurial activity and innovation and productivity amongst the working population.
The move is vital considering that Zimbabwe has over 3 million SMEs of which 15 percent are formally registered, contributing about 50 percent to the country’s Gross Domestic Product (GDP), employing nearly 75 percent of total workforce in the country.
In his remarks on the sidelines of the launch Minister Ncube said; “The venture fund will be availed starting in February next year, we are also inviting private sector, as it is a worth spend for us as Government.
“These SMEs have several challenges, which continue to negatively affect their growth, the major one being limited access to ‘patient’ capital raising options: I’m sure this innovation that we have come to launch today, is designed to specifically deal with this.”
He emphasised that there was no priority sectors with regards to the funding saying it was aiming at developing all sectors that had potential to add on to broader economic growth.
“The fund will not be sector specific, we just want to see new companies, new investments and jobs — those are critical pressure points,” he said.
Escrow group chief executive officer Collen Tapfumaneyi, indicated that the initiative was created to fill the gap where small enterprises had no chance on other stock exchange platforms that only had space for successful blue chip companies.
“Small to medium enterprises have such a significant impact on economies, so we challenged ourselves to help deepen the country’s financial markets by simplifying access to funding,” said Mr Tapfumaneyi.
The Pfuma Inotho SME Listing Platform, is a joint venture between mobile banks and the Financial Securities Exchange with the support from local and international development partners as well as the Government of Zimbabwe through the Ministry of Finance and Economic Development and the Ministry for SME.
Government is taking a leaf from Germany SME that represent 99 percent of all enterprises, employing 63 percent of the working population and contributing 55 percent of the GDP translating to a significant contribution to the global economy.
In his 2020 budget sentiments professor Mthuli Ncube highlighted that “the budget seeks to contribute towards the establishment of Venture Funds, targeting the game changing SMEs sectors augmenting the role of the Empower bank and Women’s bank.