SMEs continue counting Covid-19 induced losses

Source: SMEs continue counting Covid-19 induced losses | Sunday News (Business)

Judith Phiri, Sunday News Reporter
SMALL to Medium Enterprises (SMEs) have appealed for Government assistance as they continue quantifying their losses induced by the Covid-19 lockdowns.

Small and Medium Enterprise (SME) Association of Zimbabwe vice chair Ms Geraldine Zikwature said SMEs have been negatively affected by the Covid-19 pandemic. “SMEs have been negatively hit by the pandemic. Most SMEs can barely fulfil their obligations such as utilities and wages. The lockdown restrictions were very stringent and SMEs were hard hit by policies that seemed to favour large organisations,” said Ms Zikwature.

Ms Zikwature noted that none of their members had received cushioning funds from government. “I am actually surprised at the numbers mentioned of SMEs that have received SMEs support funds, but l can safely say that none of our members have yet received any funds. Upon scrutiny of the requirements that were there we found out that the requirements were very restrictive.”

Ms Zikwature said most of the SMEs did not have tangible assets to their names, such as houses and infrastructure that are required as collateral by the banks that are disbursing the SMEs support. “We have been speaking about these funds since last year. We want to urge Government to avail these funds at a defined time, if they say next week, let it be next week, if there is a challenge they should let us know instead of keeping us in the dark,” added Ms Zikwature.

She said since Covid-19 had affected a lot of businesses, they were appealing to Government to consider granting SMEs a tax reprieve and a rent freeze. Bulawayo Chamber of SMEs chairman Mr Coustin Ngwenya said the organisation does not have details of SMEs who benefitted from the SMEs support fund from government. “We currently do not have the details of SMEs who benefited because the SMEs were applying on their individual capacities and due to Covid-19 pandemic restrictions we could not gather the information. But now that the lockdown has been relaxed we will look for that information and also engage the funding institutions for more details,” said Mr Ngwenya.

He also noted that they appreciated the move taken by President Mnangagwa to relax the lockdown measures. Mr Ngwenya however, said some of the SMEs will not be able to resume business without financial assistance.

“It is an open secret that the majority of the SMEs live on hand to mouth, they have no savings hence they will need recapitalisation to cushion them on the effects of the lockdown,” added Mr Ngwenya. Emopage Investments director Mr Pedzisai Chimurenga Adaareva said as SMEs they have had a tough time since the beginning of the Covid-19 pandemic as some of their businesses were classified as non-essential services.

“The Covid-19 has had detrimental effects on our business at large, most of our customers are mainly medium to low-income earners, they survive on hand to mouth. Most of them were not working as they were adhering to the Covid-19 pandemic lockdown restrictions and they had limited movements. Most of them were walk-in clients, school children and people in general who really had a great impact on our businesses.”

Meanwhile, a quick survey done last year by the Ministry of Women Affairs, Community, Small and Medium Enterprises Development to appreciate the impact of the Covid-19 pandemic on SMEs showed that 59 percent of SMEs indicated that they were having challenges in paying salaries due to the pandemic. Around 57 percent of operators indicated that they would require social grants for them to be able to continue operating and also for employees whom they will not be able to continue paying.

A total of 32.5 percent indicated that they may not be able to recover fully as business from the impact of the Covid-19 pandemic, while 76.9 percent highlighted that they would require Government support in terms of funding for them to be able to fully recover from the effects of the Covid-19 pandemic.

In 2021 National Budget Statement, an allocation of ZWL$ 1 billion was set aside for supporting empowerment programmes for SMEs, youths, artists and sports, through respective financial institutions such as EmpowerBank, Zimbabwe Women Microfinance Bank, People’s Own Savings Bank (POSB) and Small and Medium Enterprises Development Corporation (SMEDCO).