Big corporates are now scrambling for the estimated $7,4 billion circulating within the informal market, NewsDay has learnt. Companies exhibiting at the International SME Expo in Harare last week said they were targeting a bite out of the SME market that was contributing nearly 70% to the gross domestic product.
BY TATIRA ZWINOIRA
Speaking at an SME conference on Thursday POSB head of retail credit, Mankulaipa Banda said the SME market was growing and becoming a dominant player.
“The SME sector has become a strategic sector for most banks and is far from being saturated. The prevailing viability problems bedevilling corporate entities justify the banks justification of strategies towards the SME sector,” he said.
“In this regard, our business banking portfolio, over 55%, is constituted as loans to SMEs.”
Banda said the products SMEs were being offered include working capital for business, loans, bank guarantees, order financing and invoice discounting.
Fidelity Life Assurance is seeking to balance out its clientele by increasing SME clients to 50%. Fidelity Life Assurance official, Paulyn Chirima said SMEs did not have full back plans.
“They do not have a pension, to fall back on once their business runs through, so that is what we are marketing so, they prepare for themselves in the latter years,” she said.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
Under the Fidelity Life financial services, the company now offer loans based on payroll deduction, top-up loans, working capital (business loans), farmer loans and personal loans to try and gear business towards the SME sector.
Old Mutual Zimbabwe Limited in August announced plans to introduce products geared towards that sector.
Gerald Chinogara, an Old Mutual Life Assurance official said life assurance products attracted SMEs.
“We have got the Easy Benefit Plan, Funeral Plan and the Diamond Retirement plan, which include a lot of SME’s as our clientele,” he said.
CBZ Holdings last month unveiled a $10 million facility to stimulate and support growth in the small-to-medium enterprises and micro finance sectors to try and tap into the SME market.
Under this facility, loans ranging up to $100 000 per project, will attract an interest rate of between 6% and 12%.
A number of other banking institutions as well as corporates have set up SME divisions to provide financial services and products towards capacity building to SMEs.
