CBZ targets SMEs

HARARE - Zimbabwe's largest financial services group by asset base, CBZ Holdings, has advised the small to medium enterprises (SME’s) to make their businesses attractive to investors.

“The SME sector represents a substantial portion of all economic activity in the country,” CBZ Bank head of SMEs Lawrence Chidembo said but added that the industry lacked necessary skills to attract funding.

“We feel that the SMEs sector can carry the country forward and Umaa Group of Colleges is one of those institutions that have grasped this concept.

“They have a lot of products targeting SMEs, especially in the agriculture sector, while some are still in the pipeline to meet the growing financing needs of this segment,” he said.

The Cleopas Kundiona-led Umaa consists of Umaa Institute Zimbabwe, Umaa Harare and Umaa Elite College.

Internationally, SMEs are recognised as engines for economic growth by virtue of their contribution to employment and wealth creation, income generation and the strategic linkages with large companies across economic clusters.

However, the SME sector in Zimbabwe face a number of problems, including limited access to finance from formal sources.

In an effort to boost employment and export generation, the Reserve Bank of Zimbabwe recently ordered banks to come up with innovative demand-driven financial products to cater for the SMEs.

“The majority of SMEs lack adequate infrastructure and funding to enhance business operations, and properly structure and drive their business towards viability. As such, there is significant scope for banks to understand the specific needs of SMEs and upscale their financial schemes and products appropriate for the SMEs,” central bank governor John Mangudya said.

As such, every banking institution in the country is now required to have an adequately capitalised SMEs business unit.

“Every banking institution shall follow a separate business strategy in financing SME loans with least formalities in executing documentation to ensure easy and speedy loan sanction and disbursement process,” Mangudya added.

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