Banks target informal sector

Banks have urged Small to Medium Enterprises (SME) to apply for loans to boost their operations as they now control a significant stake in the country`s economy.

According to a study by the International Monetary Fund (IMF), 60 percent of the Zimbabwean economy is informal.

Speaking at an SME indaba held in Bulawayo on Friday, a Central African Building Society (CABS) representative Chrispen Nemunyadzo said the economy cannot be sustainable without functioning SMEs hence they have adjusted their services to cater to them.

“Economic transformation in any country would not come if you do not have a vibrant SME sector, because of that we attach so much importance to SMEs to an extent that we have created a separate department that handles SME business, we now have a dedicated department that is meant to cater particularly,” said Nemunyadzo.

Anderson Sibanda a domestic taxes manager from the Zimbabwe Revenue Authority (ZIMRA) said they have come up with a number of incentives for the sector.

“The government doesn’t pay anything per se but there are some incentives that are created like currently, there is one that states that if you are an SME you employ at least 26 to 50 people and those people will be employed for about two years and you are compliant with ZIMRA you will pay fewer taxes and this was made like this because we want to promote SMEs to grow and become big companies,” said Sibanda.

Nemuyadzo added that they give out business loans in various currencies.

“Our loans are in the local currency but we also offer them in US dollars depending on the currency your business generates so if you are an exporter and you get the US dollars we will also advance a loan to you in that same currency, we are doing this because they are a lot of changes in our economy as we all know so if we give you a loan in US dollars and the regulators and authorities change and say everything is now in Zimbabwean dollars and you have a loan in US dollars you will have a problem,” he said.

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