Govt to help SMEs: Mugabe

Source: Govt to help SMEs: Mugabe – DailyNews Live

Blessings Mashaya      18 February 2017

HARARE – President Robert Mugabe yesterday said he was searching for ways
to stimulate the small-and medium-sized enterprise (SMEs) sector to
generate growth as the national economy struggles to recover from a
long-running crisis.

Speaking at the 11th Zimbabwe International Research Symposium yesterday,
Mugabe said more than 23 percent of Zimbabweans were now earning a living
through the SME sector.

“As you all aware the SMEs sector, where we have the majority of our
entrepreneur, is a major contributor to the Gross Domestic Product of the

“Currently, the SMEs sector employs more than 2,9 million people, and the
2017 national budget statement by the minister of Finance … highlighted
that over 50 percent of the country’s labour force is to be found in this

“With success stories having already been recorded around the globe, in
China and India for example, there is no need to reinvent the wheel on
SMEs development.

“This is especially so given the sound relationship between Zimbabwe and
India, especially in the SMEs sector, ICTs, energy, education and the
pharmaceutical sectors.”

It is estimated that between $3 billion and $7 billion is circulating in
the informal sector. Finance minister Patrick Chinamasa has said “because
of the informalisation of our economy, a lot of our people are in the
informal sector” and “they do not want to pay taxes.”

“Even those who are in the informal sector, rikanzi business ratorwa
nemunhu mutema, totoziva kuti harichabhadhara tax,” he said.

Last year government said SMEs will be allowed to use movable assets as
surety to increase access to funding under a new policy.

“The Reserve Bank of Zimbabwe (RBZ) is working towards addressing the
issue of collateral for SMEs, which will now include moveable assets as
collateral to promote financial inclusion of this key sector of our
economy,” said VP Emmerson Mnangagwa.

In May last year, the RBZ reported that $154 million of banking loans went
to SMEs in the first two months of the year.

According to the government, banks and financial institutions shun funding
SMEs because they lack proper registration, business management skills and
appropriate technology, which has constrained the growth of the sector.