Deposits in the entire banking sector rose to $4 billion this month from $3,3 billion in January amid calls by the Reserve Bank of Zimbabwe (RBZ) for more lending to the countrys small-to-medium enterprises (SMEs).
Presenting oral evidence before a Parliamentary Committee on SMEs, RBZ governor Gideon Gono last week said the countrys financial services sector had loaned out $2,8 billion by mid-May out of the total deposits.
The central bank chief urged lawmakers to craft a harmonised law that encouraged growth of small enterprises after it emerged that 5% of the total loans advanced during this period went to SMEs.
Gono said his forthcoming monetary policy statement expected in July would tackle bank charges, which had been criticised for discouraging deposits into the formal banking sector.
This comes after a survey commissioned by the Finance ministry revealed that 33% of the population does not save money due to limited banking products and high bank charges.
The survey also showed that a third of Zimbabwes population are between the ages of 21 and 30 and require viable economic activity to eke out a living.
As at May 18, the total loans that were extended to SMEs by the various institutions amounted to $164, 4 million, Gono said.
That is what is out there supporting the SMEs. Out of total loans that stood at $2,8 billion $164 and 4 million accounts for 5% of the total loans. It is sad to note and report that Barclays Bank has not extended a penny to anybody in the SME sector.
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We cannot as a central bank prescribe or force banks to lend to SMEs.
We can at best use moral suasion. But moral suasion is something that banks can take or decide not to take.
There is no law that I can use and say to a particular bank, your threshold of support is below the legal minimum.
He said the growth of SMEs operating in urban centres was being curtailed by a plethora of legislative and regulatory impediments.
SMEs, according to official figures, constitute 70% of the economy which means that the bulk of economically-active Zimbabweans are employed by the sector.
It is high time we have one consolidated legislative piece that looks into the welfare of SME as well as the informal sector and ensure that the informal sector and interests of those are captured by all economic actors, Gono said.
If 40% of the total population is below the age of 30 and we do nothing in terms of creating an enabling environment for them to find a source of livelihood, then we are sitting on a time bomb and we will not escape responsibility of what will come out of that.
