Boost for SMEs
By Edward Mukaro
SMALL and Medium Enterprises have received a major boost with regards to access credit from financial institutions, as the Reserve Bank of Zimbabwe Governor Dr. John Mangudya highlighted that the implementation of the Collateral Registry – which is expected to be completed by June 2020 – will enable small business players to access funds from banks.
SMEs have had a tough time trying to access funding from local banks over the years, despite the sector contributing significantly to the nation’s Gross Domestic Product (GDP), since the turn of the millennium.
The move by the RBZ to enhance the small business players’ chances of accessing funding from financial institutions will be a welcomed development by the business community.
Presenting the country’s Monetary Policy yesterday RBZ Governor Mangudya said, “Financial institutions are also expected to increase their support to the micro, small and medium enterprises (MSMEs) in order to deepen financial inclusion. Support to the MSME sector has the potential to promote value addition to the key sectors of the economy through diversification, export earnings and import substitution, which are all critical for increased economic output.
“Implementation of the Collateral Registry by June 2020 will enable the MSMEs to leverage on their movable assets to access funding from formal financial institutions. In this regard, banking institutions and microfinance institutions are required to submit to the Bank detailed strategies to support the productive sector during the period 2020-2021. The strategy document should be submitted to the Bank by 30 June 2020,” he said.