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 country.
“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 sector.
“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.