Govt to set up SMEs bank

HARARE - Government is moving to set up a Small to Medium Enterprise (SME) bank, a Cabinet minister said yesterday.

Sithembiso Nyoni, minister of Small and Medium Enterprises and Cooperative Development,  said the Kingston Kajese-led Small Enterprises Development Corporation (SedCo) board has to create a new paradigm in terms of servicing SMEs both financially and in terms of other services they may need.

“That bank has to be very credible that the poor go running to save their money,” Nyoni said.

“It has to be different from the conventional banks that people are shunning away from.

“Mobilise resources from within the market as those in the bottom of the economic pyramid are waiting for it. We have $7,4 billion circulating in your sector. Find strategies of mobilising that so that it comes to your bank.”

Nyoni highlighted that the establishment of the bank was a Cabinet decision. She said the board will be working with committees that have already been set-up by SMEs across the country.

An advisory council will be formed to provide linkages between small and big businesses, in order to prevent the creation of a dual economy, she said.

“SME’s are key to any economy world over,” she said.

“They are not only engines of economic growth but they are ending poverty, driving the economy and creating jobs. According to the World Bank, SMEs have created approximately 5,7 million jobs in Zimbabwe and contributing over 60 percent of the Gross Domestic Product (GDP).

“In linking with big indigenous companies, the economy becomes stronger. Most big companies are crumbling because they are not rooted in their people. SMEs are the roots. This board has to root the economy among our people.”

In his 2014 National Budget, Finance minister Patrick Chinamasa allocated $8,7 million, a 0,21 percent of the national budget to SMEs despite a request for $81,2 million.

Dorothy Mangami, the SME parliamentary portfolio committee chairperson, has warned that the “paltry” allocation would hinder economic growth and poverty eradication because the ministry was way too underfunded to spearhead any meaningful projects.

SedCo board members include Admore Kandlela, Petronella Nkomazana, Peter Madara, Molly Dingani, Otillia Dangwa, Edgar Nyoni, Godfrey Chitambo, Beauty Razemba and Curtis van Heerden.


Comments (1)

who is going to finance the setting up and operations of that bank when you cant even help Agribank? If wishes were horses.... you cant even pay civil servants and you think you can set up a bank? You mean a tuck shop or co-operative asi?

Tongogara - 27 March 2014

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