RBZ underscores role of SMEs in economy

Source: RBZ underscores role of SMEs in economy – herald

Nelson Gahadza

SMALL and medium enterprises (SMEs) continue to anchor economic growth and employment creation, the Reserve Bank of Zimbabwe (RBZ) said, as it commended private sector initiatives that promote financial inclusion.

Commending First Mutual Microfinance for coming up with innovative products to support SMEs, the central bank said the initiatives would stimulate entrepreneurship and support sustainable economic growth across the country.

This follows the launch of First Mutual Microfinance SME Loan Product on Friday, designed to address the enterprises’ unique needs, such as access to working capital needed to drive growth.

RBZ registrar, microfinance division, Mr Simbarashe Mashonganyika, who was the guest of honour, commended First Mutual Microfinance for the timely introduction of the much-needed financing solution targeted at SMEs, the engine room of Zimbabwe’s economy.

“Your commitment to supporting financially excluded and underserved sectors through tailored credit products is truly commendable and fully aligned with our national development priorities,” he said.

“Small and medium-sized enterprises continue to play a pivotal role in job creation, innovation and poverty alleviation. Yet many of these businesses face real challenges accessing capital due to limited collateral, informal operating structures or limited credit histories.”

He noted First Mutual Microfinance SME Loan Product’s calculated efforts to unlock the potential of small enterprises by offering them the lifeline they need to start, scale up and sustain their operations.

“This is not just about funding businesses; it is about transforming lives, households and entire communities,” he said.

Mr Mashonganyika said the RBZ, through its microfinance division, would continue to provide a supportive regulatory environment for the growth and stability of the microfinance sector.

He noted that some of the ongoing initiatives included the National Financial Inclusion Strategy II (NFIS II), which prioritises access to finance for women, the youth, rural populations and micro, small and medium enterprises (MSMEs).

The bank is also implementing capacity-building programmes to enhance the governance, risk management and financial literacy capabilities of microfinance institutions and their clients.

Further, the bank has rolled out initiatives such as monitoring and promoting responsible lending practices, which ensure that credit is not only accessible, but also sustainable.

The division is encouraging the adoption of digital financial services and fintech solutions to increase outreach, especially in remote and rural areas.

“Our goal is to build a strong, well-regulated microfinance sector that empowers individuals and drives inclusive economic growth, and today’s launch is an encouraging sign of progress towards that vision,” he said.

Mr Mashonganyika encouraged players in the microfinance ecosystem, including banks, non-bank financial institutions, policymakers and other strategic partners, to continue innovating and collaborating to close the financing gap and create an enabling environment for SMEs to thrive.

“To the entrepreneurs and SME owners who will benefit from this product, take full advantage of this opportunity, invest wisely and be the champions of the Zimbabwean dream,” he said.

First Mutual Microfinance general manager Mr Max Ncube said the product had been specifically designed for SMEs, given their strategic importance to the economy.

“It addresses their unique needs: flexibility, speed, low collateral requirements and access to working capital that enables growth,” he said.

“Whether it’s a grocery shop right here in Highfield looking to restock, a tailoring business in Gweru expanding into school uniforms or a transport operator in Mutare needing vehicle repairs, this product is for you.”

Mr Ncube noted that the product was a response to the challenges faced by the microfinance clients, reflecting the micro-lender’s belief in the potential of Zimbabwean entrepreneurs.

“With this loan, we are not just financing businesses — we are backing dreams,” he said.

Mr Ncube added that the product was strongly aligned with the RBZ financial inclusion strategy, noting that through collaborative efforts with the central bank, they were building a responsible, resilient and inclusive microfinance sector that supports the Government’s Vision 2030 and beyond.

“As a strategic arm of First Mutual Holdings Limited, we remain focused on integrating microfinance, insurance and financial services into a single, accessible value proposition,” he said.

“Our vision is to be the preferred provider of financial solutions in our chosen communities, and today’s product launch is a bold step towards achieving that.”

Mr Ncube pointed out that since 2018, the microfinance entity had built a diverse portfolio offering salary-based and agricultural loans, value chain financing, cattle-based SME lending and pen fattening products, among others, all tailored to meet the varied needs of the customers.

He said in addition to the branch footprint, the institution operated a network of over 150 agents countrywide.

“Additionally, we have embraced technology and our clients can reach us via our website, telephone and most impactfully, our whatsApp platform, which simplifies onboarding, queries and loan access, all with ease and speed,” he said.