Lack of access to finance, knowledge holds back SMEs

SMALL and medium enterprises (SMEs) are being held back by a lack of access to finance and knowledge, according to speakers at the fifth annual SMEs business indaba held by Diamond Berry on Friday.

The forum brought together representatives from the Zimbabwe Revenue Authority (Zimra), National Social Security Authority (Nssa) and SME associations to talk about challenges facing the sector.

ZIMRA

Diamond Berry founder and CEO Mr Nhlanhla Dabengwa said SMEs needed more information about financial institutions, book-keeping and relationships with stakeholders.

He said most times SMEs fail to access information which is critical in their day-to-day businesses.

“SMEs like any other sectors are affected by economic challenges and challenges that predominantly exist have to do with funding.

“There are ways that can mitigate that challenge which involve doing some basic things like bookkeeping and having relationships with financial institutions. This is why we are having these platforms where we discuss and see how best we can assist each other,” he said.

Since inception in 2020, Mr Dabengwa said the annual SMEs business indaba has capacitated many SMEs and the engagements continue to be fine-tuned as witnessed by the increase in attendance numbers of stakeholders. Bulawayo Chamber of SMEs co-ordinator Mr Nketa Mangoye Dlamini identified collateral as a key issue for SMEs seeking financial support.

He said the need for collateral is critical as it assures the banks that they will be able to pay back loans.

“Sometimes we say it’s not easy to access finance, but we need to take care of ourselves and do in-house cleaning to be able to access finance.

“How do we weigh our capacity to absorb that finance and do we have skills; can the banks trust us in as far as SMEs are concerned,” he said.

Other issues raised during the indaba include the need to formalise, have relevant skills, financial literacy and serious bookkeeping as experts said this would help them if someone wants to invest in their businesses or access funding from banks.

Mr Dlamini said they are encouraging their members to formalise as this comes with benefits, which include access to Government tenders and other organisations.

SMEs have become the backbone of many economies globally, but challenges facing the sector continue to hinder their growth. –chronicl.co.zw