SMEs lending conditions relaxed

Livingstone Marufu
The Reserve Bank of Zimbabwe (RBZ) has relaxed lending conditions for the US$350 million loan facility meant for small businesses, allowing beneficiaries to use moveable assets as collateral.

The facility is being administered by RBZ subsidiary, Homelink Group.

This comes at a time when most SMEs are facing challenges in drawing down money from the facility due to lack of surety.

RBZ deputy governor Dr Jesimeni Chipika, recently told The Sunday Mail Business that the central bank wants the facility to be easily accessible to boost productivity and revive the economy through increased export earnings and job creation.

“We have availed US$350 million Small to Medium Enterprises loans towards capacitation of entrepreneurs across the country but the uptake has been slow due to lack of security among SMEs.

“We are currently in negotiations with all relevant stakeholders to allow entrepreneurs to use moveable assets to access loans from different financial institutions and Homelink, which is administering the SMEs fund.

“Small businesses can now use their cars and other moveable properties while farmers can access loans using their cattle and other livestock. The move is expected to improve the uptake of loans,” said Dr Chipika.

She said the loan facilities are meant to meet business financing needs of previously marginalised groups.

Dr Chipika said the funding is being availed to every Zimbabwean as part of fostering inclusivity in the economy.

The US$350 million facility include the Women Empowerment Fund (US$15 million), business linkage (US$10 million), microfinance revolving facility (US$10 million), tourism support (US$15 million), gold support (US$150 million), cross border facility (US$15 million), tobacco export finance (US$70 million), horticulture (US$10 million), Youth Empowerment Fund (US$10 million), soya beans (US$21,51 million) and US$5 million meant for persons with disability.

Dr Chipika highlighted that in addition to the SMEs funding, the RBZ has put in place other facilities to cater for previously marginalised groups’ financing needs.

Experts have highlighted that due to strict requirements by Homelink, only about US$8 million has been disbursed from the Women Empowerment Fund, the Youth Empowerment Fund and US$5 million facility for persons with disability.

Scores of various groups were turned down by the financial institution due to lack of security.

However, the RBZ is assuring the public that due to new developments, difficulties in accessing SMEs loans will be a thing of the past.

Homelink Finance sales and channels manager Ms Sibusisiwe Mashoko has said financial training and literacy are critical in reducing non-performing loans among small and medium enterprises. She said prospective businesspeople are taught to differentiate between business and personal finances.

Entrepreneurs are capacitated by Homelink in business plan writing, business ethics, entrepreneur finance, accounting and entrepreneur mindset.

Two training workshops were carried out in Harare and Matabeleland in 2017 and 2018 respectively. More will be carried out across the country in the near future.

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