SMEs are own enemies

some of the SMEs at work

By Daniel Chigundu

 PERMANENT Secretary in the Ministry of Small to Medium Enterprises and Co-operative Development Evelyn Ndlovu has accused SMEs of pulling themselves down when it comes to accessing loans.

The permanent secretary who was guest of honour at a business conference held on the side-lines of the just ended third edition of the SMEs International Expo said SMEs can only get loans if they start banking.

“Our people (SMEs) are keeping money under pillows; they are not banking at all.

“If you are not banking you are actually killing the goose that lays golden eggs, because loans come from deposits, how then do you expect banks to give you money if you do not bank, let’s try and help banks to get money, let’s bank with them,” she said.

Ndlovu sentiments are in line with remarks made by Bankers Association of Zimbabwe president George Guvamatanga earlier in the year that it was not fair to encourage banks to give loans without encouraging people to first bring their money to banks.

The permanent secretary added that while her Ministry was doing all it can in trying to encourage SMEs to employ best practice in their businesses, it is the issue of record keeping that still remain a challenge.

Most SMEs in the country are reluctant to formalise their businesses with government for fear of being taxed and this has also put them at a disadvantage in accessing loans from financing institutions.

Zimbabwe is said to have about four million small businesses that mushroomed as a direct result of company closures that swept across the country in the last decade due to bad economic policies by government.

Statistics from the FinScope MSME Survey Zimbabwe 2012 SMEs account for close to six million jobs across all sectors of the economy.